The FICCI-KPMG report on Indian civil aviation released at the Indian Civil Aviation Show 2014, Hyderabad on 13 March 2014. The report revealed that the over taxation, lack of infrastructure in smaller cities are hampering the high growth in Indian aviation market and spread of regional services.
Highlights of the Report
• The Indian civil aviation industry is among the top 10 in the world with a size of around 16 billion dollar. India has the potential to become the third largest aviation market in the world by 2020 and largest by 2030.
• Indian carriers are expected to double their fleet size by 2020 to 1000 aircraft which promises a huge opportunity for the Maintenance, Repair and Overhaul (MRO) business.
• The government should set up an inter-Ministerial task force on MRO to check the outflow of MRO revenue, foreign exchange and jobs
• The total manpower requirement of airlines is estimated to rise from 62000 in 2011 to 117000 by 2017.
• Several Tier-II and Tier-III cities were still unconnected or underserved, for this the relaxation of regulations, revising the security requirements, allowing domestic code sharing, providing free or discounted utilities and connecting infrastructure are need to be done.
• The proposed Essential Air Services Fund needs to be set up immediately by the ministry of civil aviation.
• The industry has guided in a new wave of expansion driven by Low Cost Carriers (LCC), modern airports, Foreign Direct Investments (FDI) in domestic airlines, cutting edge Information Technology (IT) interventions and a growing emphasis on No-Frills Airports (NFA) and regional connectivity.
• The Indian civil aviation challenges are primarily related to policies, procedures, regulations and taxes where Centre and States need to take reforms in required things.
About FICCI and KPMG
Federation of Indian Chambers of Commerce and Industry (FICCI) is the largest and oldest apex business organisation in India. It is a non-government, not-for-profit organisation which is the voice of India’s business and industry.
KPMG was established in India in 1993, offers its clients a full range of services including financial and business advisory, tax and regulatory and risk advisory sevices.