Date:18/10/2008 URL: http://www.thehindu.com/2008/10/18/stories/2008101859300800.htm

Andhra Pradesh

Aviation sector unfazed by meltdown

‘Indian economy with strong fundamentals has capacity to weather any storm’

Domestic banks servicing customers 100 p.c. as against US banks
Companies express reservations about DGCA procedural norms

Photo: Mohd. Yousuf

India shining: Visitors at the Boeing 777 on display at Begumpet airport in Hyderabad during the first edition of ‘India Aviation 2008’, on Friday. -

HYDERABAD: Even as financial meltdown continues to tumble the global markets, Indian aviation industry is confident that the turbulence will not have any impact on the evolving Indian economy.

The economy with its strong fundamentals cannot be changed by a “couple of bad months” witnessed now; it will ‘weather the storm’ in the coming months, some of the entrepreneurs opined. “The strong regulatory mechanism we have in place, especially in key sectors like banking, is helping us withstand the global crisis,” Hindavia Aeronautical Services Private Limited chairman Siddhartha Bose said.

While several major banks in the United States went bankrupt failing to repay deposits to even 30 per cent of their customers, the domestic banks were servicing 100 per cent of their customers. The meltdown will also have no impact on the aviation sector as “air travel continues despite recession”, Dr. Bose told The Hindu.

“Indian economy is far stronger than one expects it to be,” said BJets’ chief executive officer Mark Baier. There is a slowdown in some sectors, but the continuing boom in construction, manufacturing and other segments will offset any impact caused by the downturn.

Aerosource (India) Pvt Limited director Vinod Singel and Monarch International president Ashok Sawhny echoed similar views claiming, that unlike China and European markets, general Indian economy was not closely connected to the US economy and this, in turn, helped in minimising the scope for any adverse impact.

Regulations

The companies, however, expressed their reservations against the regulations followed by the Director General of Civil Aviation in the sector. Though the industry was confident about the Government’s commitment to open up the skies, the procedures put in place by the DGCA were deterring investors. “It is a fact that you cannot change things overnight. There is still a lot of work to be done in this direction,” Mr. Baier said.