{"id":122907,"date":"2021-08-03T10:10:44","date_gmt":"2021-08-03T04:40:44","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=122907"},"modified":"2021-08-21T16:26:56","modified_gmt":"2021-08-21T10:56:56","slug":"rethink-aviation-policy","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/rethink-aviation-policy\/","title":{"rendered":"Rethink aviation policy"},"content":{"rendered":"<p><b>Source<\/b><span style=\"font-weight: 400;\">: <\/span><a href=\"https:\/\/www.business-standard.com\/article\/opinion\/rethink-aviation-policy-121080100897_1.html\"><span style=\"font-weight: 400;\">business-standard.com<\/span><\/a><\/p>\n<h5><b>Synopsis<\/b><span style=\"font-weight: 400;\">:<\/span><\/h5>\n<p><span style=\"font-weight: 400;\">The government\u2019s approach to the aviation sector in India has grown messy, confusing, and possibly counter-productive.<\/span><\/p>\n<h5><b>Background<\/b><span style=\"font-weight: 400;\">:<\/span><\/h5>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Recently the director-general of the International Air Transport Association (IATA) pointed out <\/span><b>that government regulation was slowing the aviation sector\u2019s recovery from the second wave<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Both capacity and pricing restrictions are creating a problem for the airline sector. Further the recently introduced <\/span><b>the Airports Economic Regulatory Authority of India (Amendment) Bill, 2021<\/b><span style=\"font-weight: 400;\"> also lacks clarity on multiple issues.<\/span><\/li>\n<\/ul>\n<h5><b>Dismal state of airline secto<\/b><span style=\"font-weight: 400;\">r:<\/span><\/h5>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">In May 2021, according to the data from the IATA, <\/span><b>domestic air travel in India was 71 % lower than in the equivalent month of 2019<\/b><span style=\"font-weight: 400;\">, before the pandemic hit.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Fleets have been downsized and older aircraft retired, making the restoration of capacity to pre-pandemic levels a non-trivial task.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Similarly, global domestic passenger traffic was 23.9 % less in May 2021 than it had been in May 2019.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The IATA has argued that it will take three years to return to the pre-pandemic load in the airline sector from the moment of reopening.<\/span><\/li>\n<\/ul>\n<h5><b>Problems created by Government:<\/b><\/h5>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Government regulations on <\/span><b>capacity utilisation<\/b><span style=\"font-weight: 400;\"> have recently been slightly relaxed.<\/span>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Before the second wave hit, domestic flights were permitted to operate at 80% capacity. Subsequently, that was revised downwards to 50% and has now been raised slightly to 65%.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Although some airlines, including market leader IndiGo, were in favour of going all the way back to 100% capacity. Last week, IndiGo itself reported a larger than expected net loss in the first quarter of 2021-22 of Rs 3,174 crore.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The government has also imposed <\/span><b>price caps <\/b><span style=\"font-weight: 400;\">on the airlines. These are based on the duration of flights and range at present from Rs 2,600 for 40-minute flights to Rs 8,700 for flights of over three hours.<\/span>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">However these <\/span><b>haven\u2019t been relaxed considering rising fuel costs<\/b><span style=\"font-weight: 400;\"> in recent times. This has forced many airlines to shutter routes. For example, Vistara had announced with great fanfare a flight to Dehradun, which it had quietly stopped.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The Airports Economic Regulatory Authority of India (Amendment) Bill, 2021 aims to energise flights to smaller airports. However there is no clarity over the nature of support to be given to achieve this objective.\u00a0<\/span>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">For instance, if the government decides to subsidise airlines rather than ending price controls. Then this will in effect be an unjustified transfer to well-off Indians.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h5><b>Way Forward:<\/b><\/h5>\n<ul>\n<li><span style=\"font-weight: 400;\">The government should take<\/span><b> \u201cdata-driven\u201d decisions <\/b><span style=\"font-weight: 400;\">because otherwise restrictions are speedily put in place and removed at a relatively slow pace.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">It should swiftly respond to the broader data available about variants, transmission, and positivity rates in various areas.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Source: business-standard.com Synopsis: The government\u2019s approach to the aviation sector in India has grown messy, confusing, and possibly counter-productive. Background: Recently the director-general of the International Air Transport Association (IATA) pointed out that government regulation was slowing the aviation sector\u2019s recovery from the second wave.\u00a0 Both capacity and pricing restrictions are creating a problem for&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/rethink-aviation-policy\/\">Continue reading <span class=\"screen-reader-text\">Rethink aviation policy<\/span><\/a><\/p>\n","protected":false},"author":10322,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[8863,8862,9196,216],"class_list":["post-122907","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-airports-economic-regulatory-authority-of-india-amendment-bill-2021","tag-aviation-policy","tag-aviation-sector","tag-gs-paper-3","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704852345},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/122907","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10322"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=122907"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/122907\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=122907"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=122907"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=122907"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}