Monday, November 10, 2014

Government unveils draft aviation policy; may privatise Air India, Pawan Hans

The Economic Times

Published : Nov 10, 2014

The government on Monday announced a draft set of reforms for the aviation sector that includes plans to list airport operator Airports Authority of India (AAI) and helicopter service provider Pawan Hans Ltd, arguing that listing will not only improve efficiency but also instill transparency in their operations.

Making the announcement, civil aviation minister Ashok Gajapathi Raju said views of the public will be sought on the draft before the government adopts the policy. "Listing improves transparency and efficiency," the minister said. "AAI will be corporatised and the listing on the stock exchanges would follow. Listing of Pawan Hans would also be undertaken with the same objective. Pawan Han's listing straightaway might make sense. For AAI also, that is possible."
Aviation secretary V Somasundaran said the ministry expects the process to conclude in six months. "After the policy is finalised, we need to get into discussions with the disinvestment ministry on various issues," Somasundaran said. "We hope to complete the process in six months.
The exercise will help bring transparency and greater professionalism in the boards of the two entities."
Analysts have welcomed the move to list the two entities. "It's a good move, as it will bring market discipline into these companies. It will not just unlock the potential of these two companies but also make them much more professional than today by providing more autonomy and professional management.
These companies should become much more professional to compete," said Dhiraj Mathur, leader-aerospace and defence at PwC India. On the suggestion to privatise national carrier Air India, Raju said it will be decided in due course of time. "If it could get listed, I would be the happiest person," the minister said. "An experts committee would be set up soon to develop a roadmap for Air India. All these suggestions have emerged.
We will have to take a conscious decision as it is a delicate matter," he said. The draft also talks of privatising only Jaipur and Ahmedabad airports and awarding management contracts for Kolkata and Chennai airports. One of the key initiatives of the draft policy is to develop helicopter aviation in the country. This is the first time that the country's aviation policy has categorised helicopter aviation separately from general aviation. The focus of the policy is to develop infrastructure to support helicopter operations.
The Business Aircraft Operators Association, a grouping of all business jet and helicopter operators, has termed this a step in the right direction. "We welcome the move to develop helicopter aviation, which will promote its greater use by industries to enable business. While we see a major thrust on remote connectivity in the draft, the role of small aircraft operators needs to be given due consideration," the association said in an email reply.

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