This Article is From Apr 14, 2020

Use COVID-19 Crisis As Opportunity To Reform Aviation Sector: SpiceJet's Ajay Singh

Many airlines in India are close to bankruptcy as their cash reserves are running out amid the nationwide lockdown

Use COVID-19 Crisis As Opportunity To Reform Aviation Sector: SpiceJet's Ajay Singh

Many airlines in India are close to bankruptcy

Amid the nationwide lockdown till May 3 to combat the coronavirus outbreak, SpiceJet CMD Ajay Singh on Tuesday said that it is the right time to bring about structural reforms in the country's aviation sector. "Bringing aviation turbine fuel (ATF) is a long pending request... Second thing we need to look at this whole structure of airports and the way the airport concessions are given," the Chairman and Managing Director of the budget airline said at a webinar organised by the Bird group.

If an airline puts fuel in an airport's tank - which costs around Rs 25 crore in Delhi to build - the airport operator recovers Rs 450 crore per year, he mentioned.

"We have crazy anomalies like that. This is the time when we should look in these areas," he added.
The Indian aviation sector needs short term help from the government and the government is actively looking at what they can do, he mentioned.

"People say that India only reforms in a crisis and if that is true, we should certainly use this crisis to bring about the reforms that we have sought for so long," he noted.

Many airlines in India are close to bankruptcy as their cash reserves are running out amid the nationwide lockdown, industry body FICCI had told Civil Aviation Minister Hardeep Singh Puri and Finance Minister Nirmala Sitharaman through a letter earlier this month. Almost all the Indian airlines, including SpiceJet, have introduced cost cutting measures such as pay cuts and leave without pay to deal with the coronavirus crisis.

Singh said at the webinar that normally, a bid to operate an airport is won by the person who can give the Airports Authority of India (AAI) the highest amount of money.

"In turn, the airport operator then asks to bid for services like cargo handling or ground handling or even check-in facilities, and these are given again to the highest bidder," Singh noted.

"So, when the highest bidder gets to perform these services, it needs to maximise its profits, and in turn, it asks the airlines and passengers to pay the highest amount that it can get from them," the CMD noted.

India had imposed a 21-day lockdown from March 25 to curb the coronavirus pandemic. Consequently, all domestic and international commercial passenger flights were suspended for this time period.
However, cargo flights, offshore helicopter operations, medical evacuation flights and special flights have been permitted to operate by Indian aviation regulator DGCA.

"We have seen how countries protect their own carriers. Today, when we go to the Middle East, we are told clearly that we are not welcome. And the middle-eastern carriers keep pushing the Indian government to try to get more and more of their flights into India," Singh said.

"The same happens in China. So, we need to be clear what our long term objective is. So, if our objective really is that we have global airlines made in India, and we have global hubs in India, we need to get our policies right. This is the right time to debate this and bring structural reforms in our system," he mentioned. 

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