Budget 2018: Aviation sector welcomes emphasis on airport infrastructure


The aviation industry has welcomed the proposal in the Union Budget 2018-19, to enhance airport capacity by five times but has demanded swift execution, to meet the infrastructure shortfall

Finance minister Arun Jaitley in his budget presentation said that the government proposes to expand airport capacity by more than five times, to handle a billion passengers a year, adding that the balance sheet of the Airports Authority of India will be leveraged, to raise more resources for funding expansion works.

“We welcome the focus on airport infrastructure capacity, announced in the Budget. In our 20-year passenger forecasts, IATA anticipates that India will become the third-largest aviation market by 2024. However, this is by no means guaranteed. To make this a reality, airport capacity in India needs to be augmented and expanded quickly,” said Amitabh Khosla, country director -India, International Air Transport Association (IATA).

IATA also underlined that Mumbai was lagging in economic development, because of capacity constraints at the city’s Chhatrapati Shivaji International Airport. “Navi Mumbai airport is still a distant dream. In the meantime, Mumbai continues to fall behind, in aviation activity and Maharashtra state is unable to maximise the economic potential that can be delivered by aviation. We urge the government to urgently look at innovative approaches, to bridge the infrastructure shortfall,” Khosla added.

KPMG has stressed that the government needs to turn its words into action. “It is encouraging to see the FM talk about increasing airport capacity, to handle one billion trips per annum from around 180 million currently. It’s fantastic to see that the government is shifting from short-term planning to a long-term vision. The focus should now shift, to the execution of this challenging yet achievable vision,” said Amber Dubey, partner and head, aerospace and defence, KPMG. The aviation industry’s fight to bring jet fuel under the ambit of GST will, however, continue, he said.

Another consultancy firm, Deloitte India, lauded the government’s regional connectivity scheme. “The budget sets the right course for the aviation sector. It reaffirmed commitment to sustaining the growth in the sector, by focusing on substantial increase in airport capacity. UDAN is expanding the aviation network and hitherto unserved airports and helipads will be connected by existing and new operators,” said Peeyush Naidu, partner, Deloitte India.

The UDAN scheme focuses on greater regional connectivity. The budget addresses the aspirations of a modernising nation, through initiatives to expand air connectivity under the UDAN scheme, added Pierre de Bausset, president and managing director, Airbus India. Low-cost carrier SpiceJet too lauded the emphasis on airport expansion. “This initiative has the potential to transform the Indian aviation sector and make India a global aviation superpower,” said Ajay Singh, chairman and managing director, SpiceJet.

AirAsia India voiced the hope that the emphasis on tourism this year, will give impetus to the aviation sector. “We believe that tourism will be the biggest contributor to the aviation industry and this year’s budget is a testimony to that. We look forward to the 10 iconic tourism destinations that the government will promote this year, as part of the proposed budget,” said Amar Abrol, MD and CEO, AirAsia India. In his Budget speech, Jaitley proposed to develop 10 prominent tourist sites into iconic tourism destinations, by involving infrastructure and skill development, development of technology, as well as attracting private investment, branding and marketing.

 

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