Union Minister for Civil Aviation Current Affairs - 2019

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Civil Aviation Minister orders setting up a mechanism to regularly Monitor Airfares

Union Minister for Civil Aviation Hardeep Singh Puri has ordered setting up a mechanism to regularly monitor airfares in the country. With the setting up of new mechanism, the airfares will now be regularly monitored by Union Ministry of Civil Aviation and Directorate General of Civil Aviation (DGCA).

Key Highlights

The Aviation Ministry move to set up a mechanism in Civil Aviation Ministry and Directorate General of Civil Aviation (DGCA) to monitor air fares on a regular basis is to keep an eye on how airlines pricing is working.

With monitoring of airfares on an ongoing basis, the Ministry can get some learning from that and then discuss it with airlines.

However, Aviation Ministry clarified that the government currently does not have any intention to regularise the fares.

Centre is also concerned about higher taxes on aviation turbine fuel (ATF), and has also requested state governments to reduce excise duty on it.

Besides this the aviation ministry, had also raised concern over pricing war between airlines that analysts believe is primary reason for losses of airline industry.

Vision 2040 document: Aviation

The Union Minister for Civil Aviation Suresh Prabhu released the Vision 2040 document in the Global Aviation Summit 2019. The Global Aviation Summit 2019 is organized in Mumbai with the theme ‘Flying for All’.

Forecasts of the Vision Document

The forecasts of the Vision 2040 document are:

  • The document estimates that India will need 200 airports and an investment of $40-50 billion to handle at least 1.1 billion passengers flying to, from and within the country.
  • It is estimated that passenger traffic (to, from and within India) for FY 2040 would be 1.1 billion, which is six times the 187 million traffic recorded in FY 2018.
  • Most of the airports’ passenger capacity will saturate in the next 15 years and India will have to nearly double the count from 99 to 200.
  • Even the second airports in regions like Delhi and Mumbai would be saturated by 2040 and will require a third airport.
  • In order to cater to this huge passenger traffic, India will have to holistically develop airports having all stakeholders on board. This has to be coupled with providing quality service to flyers.
  • The scheduled airline fleet will rise from 622, at the end of March 2018, to 2,360 till March 2040.
  • Even though India is a “price sensitive” market, gradual rise in per capita incomes, increased (perceived) value of ‘time’, propensity for leisure and tourism will lead to more and more Indians using airways as a medium to travel.

Recommendations made in the Vision Document

The Vision Document makes the following recommendations:

  • Ushering in amendments to Land Acquisition, Rehabilitation and Restructuring Act, 2013 and adopting “land-pooling” techniques to develop newer airports.
  • Lower Goods and Services Tax (GST) since taxes add pressure on the airline’s bottom line.
  • Aviation turbine fuel (ATF) to be brought under GST.

The Vision document for 2040 also addresses areas of concerns for maintenance, repair and overhaul (MRO), human resource development, aviation safety and security, ground handling mechanism, air navigation and remotely piloted aircraft (drones).