The Hindu : National : “Take States on board to partner civil aviation growth”

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Saturday, Jan 12, 2008
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“Take States on board to partner civil aviation growth”

Special Correspondent

Conference to be held to apprise Chief Ministers of infrastructure development: Patel

80 airports to be upgraded with better infrastructure
Government can divest its stake in AI later this year

— Photo: Rajeev Bhatt

SOARING HIGH: Civil Aviation Minister Praful Patel launching a brochure on “India Aviation 2008,” an international exhibition, in New Delhi on Friday.

NEW DELHI: Even as the civil aviation sector continues to record impressive growth year on year, Civil Aviation Minister Praful Patel on Friday said development of airports, multimodal transport connectivity, cargo, and repair and training facilities would have to be speeded up.

He also stressed the need for taking all States on board to partner growth in the sector. “States have to be catalysts for growth and they can have reasonable taxation which will drive more volumes and spur growth.”

A conference of Chief Ministers would be held later this month to apprise them of infrastructure development in the sector, a key component in boosting trade and commerce.

Mr. Patel was speaking after announcing the launch of “India Aviation – 2008,” an international exhibition and conference to be held in Hyderabad from October 15.

The Airports Authority of India planned to invest about $1.2 billion in modernising 35 non-metro airports. About 80 airports would be upgraded with better infrastructure.

The MRO (Maintenance-Repair-Overhaul) business was also set to gain momentum, and domestic and international cargo traffic was also estimated to grow by 4.5 and 12 per cent over the next decade.

Talking to reporters later, Mr. Patel said the government could divest its stake in the national carrier Air India through a public issue in the second half of 2008.

“We may consider issuing an Initial Public Offering in the second half of this year.” On earlier occasions, he indicated that 10-15 per cent of the merged entity’s equity could be divested to enhance the carrier’s equity base. Employees’ stock option would also be considered during the dilution of equity.

To questions on the rising price of aviation turbine fuel, Mr. Patel said he would meet Finance Minister P. Chidambaram next week to seek a reduction in custom and excise duties on ATF which was priced in India on the higher side. He also urged the State governments to reduce sales tax on ATF.

Fuel accounts for 35-40 per cent of the total operating cost of airlines.

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