Facilitating aviation with right policies

The draft aviation policy announced by the government has many welcome elements but it also suffers from tentativeness and uncertainty in some respects.

It intends to reform the aviation sector which badly needs a thrust to realise its potential.

It is a sunrise sector and has seen much expansion in the last many years. It can be considered an infrastructure business and has positive links with the economy.

While the entry of private players has changed the face of the industry, it is not in good health.

What the government basically has to do is facilitate the functioning of the industry with the help of right policies and provision of the best infrastructure which only it can create.

But the role of the government as a player has distorted the sector and so there is the need for a more liberal policy framework.

The decision to list two public sector entities in the aviation field – the Airports Authority of India (AAI)  and Pawan Hans Helicopter – on  stock exchanges will help them as it will promote transparency in their functioning and increase efficiency.

The proposal to list AAI is not new but had been stalled on the expectation of a better valuation.

It is a profit-making company and has a prime role in the management of airports.

The decision to list Pawan Hans is a  recognition of the important role of helicopter aviation.

Listing will help both companies to benefit from public scrutiny. But the government seems to be dillydallying on Air India which is the most suitable candidate for privatisation among all public sector companies.

It has set up a committee to find a road map for the carrier to “achieve its full potential’’.

Such exercises have been undertaken in the past and thousands of crores of tax payers’ money has been wasted on the airline.

It defies sense to give it another chance and to expect that it would ever realise any potential. The very idea of a national airline is flawed.

Governments should not get into the business of commercial air services and the funds invested in it could be better and productively used in other areas.

The draft policy envisages the creation of more airports through public private partnerships, improvement in air connectivity, rationalisation of fuel costs and improved passenger facilitation.

It also aims to promote air cargo business and to provide better facilities for repair and overhaul services.

These are all required to boost the aviation business.

The government should focus its attention on them rather than on supporting ventures which only drain the exchequer and have no hope of turnaround.