Date:22/06/2005 URL: http://www.thehindubusinessline.com/2005/06/22/stories/2005062203250300.htm

Back Airlines must operate from smaller centres too: Praful Patel

Our Bureau

Mumbai , June 21

SOUNDING a note of caution on the domestic airline companies' recently announced fleet expansion plans, Mr Praful Patel, Minister for Civil Aviation, has said the Indian aviation market had not yet matured and companies entering the sector should tread carefully as they chalked out their expansion plans.

He urged the companies to achieve a critical mass before firming up aircraft purchases. This was especially crucial in relation to their ability to respond to unexpected crises that may spring up, such as 9/11.

Addressing a seminar on investment in aviation, he asked them to operate from airports in smaller centres rather than concentrating on Mumbai and Delhi, which already had heavy traffic at peak hours. In this regard, he said the Government would offer airlines incentives to use non-metro airports. The details of the scheme, he said, would be firmed up in course of time. Further, he forecast that the fare structure of airlines across-the-board would stabilise with time.

He said the Empowered Group of Ministers would take up the modernisation plans of Delhi and Mumbai airports on Wednesday. Eight entities have offered bids for the modernisation of the two airports.

Talking about the possibility of setting up secondary airports specifically for low-cost carriers, he said, none of the metros currently had two airport facilities. However, the use of airports in neighbouring cities such as Nagpur and Pune were an option that the low-cost carriers should actively consider.

He ruled out a change in the ownership pattern of domestic airlines, emphasising that foreign airlines would not be allowed a stake in the sector.

Air-India and Indian Airlines, he said, were keen to form joint ventures to improve their maintenance, repair and overhaul (MRO) facilities. These could be spun off into separate profit centres, he said.

A multi-modal cargo and passenger hub had been planned at Nagpur. Further, the development of the Navi Mumbai airport would be linked to the expansion and capacity of the existing airport. The land for the new airport had been identified and studies were being conducted for its suitability, he said.