5.2. Challenges & Recommendations

♤ Airline balance sheets are unstable, with most failing to register profits over multi-year periods.

♤ At various times, airfares have been unsustainably low or unjustifiably high, and there has been no clear regulatory response.

♤ The cyclical anxiety over government subsidies to Air India, and the consequent effects on the Industry, often results in little more than a fresh capital injection.

♤ Some issues have also arisen regarding perceived high charges in some of the new private airports.

♤ New airport projects are announced with overlapping or insufficient catchment areas, without regard for airspace issues or the potential for airlines to operate there.

♤ India’s civil aviation sector is facing acute shortages in manpower (pilots, cabin crew, air traffic controllers, ground staff etc). This shortage is primarily due to a significant lack of training infrastructure, including training academies, instructors and equipment.

♤ Aviation Turbine Fuel (ATF) is much more expensive in India than regional airports offshore. ATF accounts for almost 40% of the operating cost of Indian carriers as against a figure of 20% for international carriers.

♤ Amidst all this, the industry is hamstrung by a tortuous system of taxes, cesses, rules and regulatory restrictions.

♤ Aviation is part of a multi-modal network. Every decision on air transport infrastructure should ultimately be able to be traced back to a sense of place and purpose within the wider transport network that is inclusive of all modes. Network-centric thinking should prevail while planning air transport infrastructure. Efforts should be directed at building complementary regional, national and international air networks.