Modi’s biggest gift of 2017: PM announced in FICCI’s 90th Annual General Meeting

Addressing industry chamber FICCI’s 90th AGM here earlier this month, Prime Minister Narendra Modi said his government’s policy reforms had resulted in an equitable and inclusive growth for the sector.

“In the aviation sector, we have brought in policy changes that have enabled even a ‘hawai chappal’ (slipper)-wearing person to avail the benefits of air travel. We have brought this type of change,” Modi said.

Besides augmenting passenger traffic growth, the Rs 2,500-an-hour flight services launched under the regional air connectivity UDAN scheme also expanded the country’s aviation infrastructure.

In the first phase, contracts to five companies were awarded to operate flight services on 128 routes to 70 airports. Till recently, RCS-Udan operations to 13 airports had commenced, with an additional 12 ready to receive flights.

Apart from enhanced services to non-metro cities, the sector has also benefited from the rise in domestic disposable income levels and lower jet fuel prices, all of which accelerated passenger traffic growth in 2017.

According to the latest data from the Directorate General of Civil Aviation (DGCA), passenger traffic during January-November 2017 zoomed 17.27 percent to 105.9 million.

The rise in passenger traffic aided airlines to post healthy quarterly figures and also place new aircraft orders in anticipation of future growth. The government, however, did not see the same logic working in favor of debt-ridden Air India.

The Union Cabinet, in a momentous decision, mandated the formation of an “Air India — Specific Alternative Mechanism” headed by Finance Minister Arun Jaitley to look into the strategic divestment of the airline.

Among the potential bidders, budget passenger carrier IndiGo evinced interest in buying the airline’s international operations and its subsidiary Air India Express. In addition, aviation industry majors SATS, Bird Group and Celebi have shown interest in buying Air India’s ground handling unit.

Currently, the airline is under a massive debt burden of Rs 50,000 crore and had posted an operating profit of Rs 105 crore in 2015-16.

The year also saw some very low points, especially with frequent clashes erupting between passengers and crew. These rare, but disturbing incidents forced the airline industry to even debar individuals, including MPs, from using their services.