India to privatise 6 more airports, rationalise use of air space to boost economy

• Restrictions on utilisation of the Indian air space will be eased so that civilian flying becomes more efficient, said Sitharaman

• India will privatise six more airports and the bidding process for the same will begin shortly, she said

New Delhi: In a slew of measures announced to give a fillip to the aviation industry in the aftermath of the Coronavirus lockdown, the government has proposed to privatise six more airports, rationalise the use of airspace to cut short flying time and encourage the Aircraft MRO (Maintenance, Repair and Overhaul) industry to turn India into a global hub. "Restrictions on utilisation of the Indian air space will be eased so that civilian flying becomes more efficient. This will bring a total benefit of about Rs 1,000 crore per year for the aviation sector. This will lead to optimal utilisation of airspace, reduction in fuel use, time and will have positive environmental impact," said the Finance Minister.

While noting that airlines have not been flying on the shortest possible routes, Sitharaman said, "This actually has to be rationalised. Optimum use of airspace is important." 

Privatisation of 6 more airports in the offing

Without naming the airports, the minister said that India will privatise six more airports and the bidding process for the same will begin shortly. "Six more airports have been identified for the 2nd round bidding for Operation and Maintenance on Public-Private Partnership (PPP) basis. Additional investment by private players in 12 airports in 1st and 2nd rounds is expected to bring around Rs 13,000 crore. Another six airports will be put out for the third round of bidding," said the minister.

Envisaging India as a global hub for Airport MRO

India will also take steps to encourage the Airport MRO industry, Sitharaman said. "Tax regime for MRO ecosystem has been rationalised. Aircraft component repairs and airframe maintenance to increase from Rs 800 crore to Rs 2,000 crore in three years. It is expected that major engine manufacturers in the world would set up engine repair facilities in India in the coming year. Convergence between defence sector and the civil MROs will be established to create economies of scale. This will lead to maintenance cost of airlines to come down," said the minister.

"When we talk of a self-reliant nation, it certainly is to make India strong and to face the challenge…Many sectors need policy simplification… Once we decongest a sector, it will become stronger and competent enough to give growth and employment," the minister said.

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