Disinvestment Committee of Air India to meet soon: Hardeep Singh Puri

Saturday, July 20, 2019

New Delhi, 20 July 2019: 
Civil Aviation ministry has formed an alternate mechanism for disinvestment of Air India to give timeline for disinvestment and first meeting will take place soon, Mr Hardeep Singh Puri, Hon’ble Minister of State (I/C), Ministry of Civil Aviation & Urban and Housing, said at the sidelines of an ASSOCHAM event held in New Delhi today.  
We are currently working on a 100 Day Program, and a five year vision of document of both Housing and Urban affairs and Civil Aviation ministry, said Mr Hardeep Singh Puri, Minister of State (I/C), Ministry of Civil Aviation at 12th International Conference-cum-Awards on Civil Aviation & Cargo.
Mr. Puri further said there is already 100% FDI in several parts of Civil Aviation sector, the budget has pointed out two specific sectors for FDI, one is maintenance & repair and other is leasing.
The growth of air cargo is critical for industries such as e-commerce, pharmaceuticals, electronics, agriculture, horticulture, floriculture, animal husbandry and marine exports, and high-value goods, including gems and jewellery and fashion garments, where shipments are highly time-sensitive, stated Mr Puri.
In conformance with the objectives of the holistic National Civil Aviation Policy, 2016, a number of initiatives and measures were taken up to sustain the growth impetus in air cargo, efficiency improvement and promotion of ease of doing business across the air cargo value chain.  
The first National Air Cargo Policy’s (NACP) outline was released at the Global Aviation Summit in January 2019.  It aims to achieve fundamental re-engineering of the whole-of-the-value-chains for domestic and export-import air freight for reaching the target of handling 10 million tonnes by 2026-27. 
The objectives of the NACP outline are to leverage the Indian air cargo network to provide cargo transportation by air at an affordable cost and connect every village to the national and global supply chains. It also aims to make air cargo and logistics in India among the most efficient, seamless, and cost and time effective in the world over a period of 10 years, said Mr. Puri. 
Impressive double-digit domestic air cargo growth of 12.1 per cent has been achieved in 2018-19 over 2017-18. 
Air cargo handled reached to 3.6 MMT  comprising domestic air cargo of 1.36 million and international air cargo  was 2.2 million MT (y-o-y 2.6 % growth), added Mr. Puri.  
General cargo tonnage handled increased by over 10 per cent per year in last four years as against negative growth in the preceding four years. 
Indian air express and courier industry is one of the fastest growing markets globally.  Growth estimated at 17% CAGR during the last five years, entry of e-commerce giants into the air cargo business expected to give further impetus to its growth.
The government has taken several initiatives to sustain the growth impetus in air cargo and to bring the country’s logistics on a par with global standards.  Service Level Standards set for entire air cargo eco-system. Reduction of free period for air cargo clearance from 72 hours to within 48 hours across all major airports, noted Mr. Puri.
Progressively, air cargo dwell time on imports has been reduced from 72 hours to about 52 hours by December 2017. By the end of December 2018, the dwell time further reduced to about 39 hrs for imports (IATA). Dwell time reduced at major airports by 36-72% on export cargo, and averages below 24 hours.
A digital National Air Cargo Community System is expected to be developed and operationalized within one year as a common platform for all stakeholders to communicate with each other digitally and improve ease of doing business in air cargo sector.
Minister of State (I/C) of Civil Aviation Mr Hardeep Singh Puri who was the Chief Guest for the occasion gave away the awards to the winners nominated under various categories. Some of the other winners were Airbus, AAI Cargo, Bird Academy, Air India Express, Spice Jet, Frankfinn during the summit.
In his address at the ASSOCHAM conference, Mr Ajay Singh, chairman and managing director, Spicejet Limited said that there have been enough of talks about various problems being faced by the civil aviation sector and its time finally something was done about it.
“The inclusion of aviation turbine fuel in GST is a long standing demand, every year we spend countless hours with various ministries of the government talking about this, if the ambition indeed is to be globally competitive, to create international hubs and carriers that are competitive in this world and if indeed the ambition is to be world leader in aviation, we need to resolve this problem quickly, there has been enough talks on this issue,” said the Spicejet chief.
Mr Singh added, “There is no country in the world which taxes aviation fuel like we do, we pay 35 per cent tax on average on aviation fuel, this definitely needs to be addressed urgently.”
He further said that instead of those taxes coming down, now the government has imposed few more taxes. “We have additional tax on import of spare parts that come back after repair, which is five per cent, which the industry has been paying for last year and a half, about INR 2,000 crore of industry money is struck under protest.”
Mr Singh added, “We also pay tax on tax in very many ways, in transport of fuel to our planes we pay tax twice over. As if it was not bad enough to pay the highest tax, we are also paying tax twice over.”
He also said that a country with 1.3 billion people needs to have its own international hubs. “We indeed must be a true international global hub of the scale of Dubai or Singapore and we need to have a strategy to compete with them and we must work as a country to finalise, formalise a winning strategy which ensures that India is a global hub and a leading aviation country in this world.”
Lauding government’s handling of Jet Airways’ episode, Mr Singh said, “We need to celebrate the fact that despite the failure of Jet Airways, the speed at which India recovered and got capacity back and got fares back to a normal level, is a great testament to the way India and government work together to make that happen.”
He however added, “At the same time, I think, this is a time for sombre reflection, the failure of Jet Airways and the condition of Air India, I think must give us pause.
Addressing the ASSOCHAM conference, H.E. Dr Ahmed Al Banna, UAE Ambassador to India impressed upon the need to see how can both countries collaborate, cooperate and expand the industry and become partners in growth of the aviation sector.
“The vision of our leadership with our plans, end goals, I think it will make us reach to the maximum relationship in all sectors, including airline as we are trying to grow people to people connections,” he stated.
H.E. Mr J. Goburdhun, GOSK, High Commissioner of the Republic of Mauritius to India in his address said that civil aviation sector must collaborate in facilitating exchange of people among the Indian diaspora and make special flights or low-cost carriers available to visit the ancestral land and to develop tangible and intangible heritage.
“Last January, the Government of Mauritius chartered a special flight for the Indian Diaspora to participate in the Pravasi Bharatiya Divas at concessional rate, all taxes were removed and we gave the status of pilgrimage to our roots and motherland as tirth yatra. Similar, initiative should be encouraged to facilitate the movement of Indian diaspora,” he said.
Mr Goburdhun added, “For tirth yatra out of 30 million, three million of Indian overseas pilgrims could visit India every year, I therefore count on the collaboration of airline industry to give special attention to harness the potential of Indian diaspora and help them realise their dream of participating in building of new India.”
Amid others who addressed the conference included – Other Speakers will include:  Mr Vineet Agarwal, Vice President; Mr Ajay Singh, CMD, SpiceJet Limited; Shri Ashish Saraf, Head-Airbus Helicopters, India & South Asia; Mr Narayana Rao, Chairman and Mr Ankur Bhatia, Co-Chairman, ASSOCHAM National Council on Civil Aviation.
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