Patel: Growth plans

New Delhi, Feb. 5: The government is considering imposing a cess on air travel to fund the development of smaller airports, which are not commercially viable.

“We are proposing a cess in future to support the viability gap funding to develop non-viable airports and air routes,” civil aviation minister Praful Patel said here today, adding that the proposal was at a preliminary stage and would be finetuned.

“What we are trying is to either redefine the existing passenger service fee (PSF) or have an additional levy. There may be a change in the nomenclature,” he said.

The Naresh Chandra Committee has already recommended such a cess, and the government was considering this idea, Patel said.

Patel also said the government would consider increasing the FDI allowed in cargo and charter airlines from 49 per cent to 74 per cent.

Foreign airlines are now not allowed to buy stakes directly or indirectly in airlines. However, Patel said the government would consider relaxing this for cargo airlines.

“In terms of the cap on scheduled airlines, the existing cap shall continue to be at 49 per cent with no foreign airline participation,” Patel said.

The civil aviation ministry also wants the FDI cap for helicopter and seaplane services to be hiked to 100 per cent. Officials said a similar provision could be made for heliports.

The government is also considering setting up ‘merchant greenfield airports’, which will be private airports built on privately owned lands within permissible civil aviation parameters. This, he said, would solve the problem of land acquisition, which is a major hurdle in building infrastructure projects in the country.

Patel also said in view of the unprecedented growth in civil aviation, there might soon be a need to build secondary airports in non-metro cities in the next 5-10 years.

He also said the Centre would soon hold a meeting with all the state governments for a plan to develop some of the 300 airstrips across the country which are lying unused.

The minister said this could provide greater regional connectivity. The ministry is considering putting the airstrips up for bidding in blocks for development as it may not be feasible to do it individually.