Six more airports to be auctioned, airspace to be rationalised: Sitharaman's reform push

With an aim to exploit the opportunity of the Coronavirus crisis and initiate structural changes in the Indian economy, the Modi government will now push through necessary governance and administrative reform to aid the industrial and mining sector and introduce legislation to liberalize markets. As part of this, Finance Minister Nirmala Sitharaman has announced plans to privatise six more airports in India on a Public-Private Partnership (PPP) model and make the country an MRO (Maintenance, Repair, and Overhaul) hub for airlines in the region.

Unveiling the fourth tranche of a massive stimulus package pledged by the Modi government to rescue the Indian economy from the devastating fallout of the Coronavirus pandemic, Nirmala Sitharaman announced structural reforms in eight sectors — coal, mining, aerospace, defence production, social infrastructure, power distribution in Union Territories, Space, and atomic energy.

"We need to decongest sectors for boosting the economy and prepare for tough global competition. The structural reforms being announced today will impact those sectors which are new horizons of growth, unleashing new investment, boosting production and creating jobs," FM Sitharaman said.

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Airspace management

For efficient airspace management for civil aviation, restrictions on the utilisation of the Indian airspace will be eased so that civilian flying becomes more efficient, the FM said. This, Sitharaman said will bring in a total benefit of Rs 1,000 crore per year to the aviation sector.

She noted that only 60% of the nation's airspace is fully available for use and increasing that is necessary to save travel time, fuel and recourses. The move will also be environment-friendly and can be useful in fuel conservation, the FM noted.

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More airports on the block

Auction of six more airports in the country will commence immediately and the Airports Authority of India (AAI) will do it on the PPP model, Nirmala Sitharaman announced. An additional investment worth Rs 13,000 crores by private players in 12 airports in the first and second rounds is also expected. Six more airports will be put on the block in the third round.

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Making India MRO hub

To make India a hub for the MRO sector and exploit this lucrative business, major engine manufacturers in the world will be invited to set up reair facilities in the country in the coming years. Investments in aircraft component repairs and airframe maintenance to increase from Rs 800 crore to Rs 2,000 crores in the next three years.

Convergence between defence sector and civil MRO will be established to create economies of scale. These measures, Nirmala Sitharaman said, will reduce maintenance costs for airlines in India.

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