Aviation sector (The Hindu)

Mains Paper 3: Economy
Prelims level: Aviation sector
Mains level: Requirement of fast-track policy implementation to boost Aviation sector

Context

• India's civil aviation industry has been witnessing rapid growth in the past few years to become the pride of the nation, and rightly so.
• Driven by a growing economy, rising incomes, increasing competition among airlines and a supportive policy environment, India stands proud as the seventh largest aviation market with 340 million passengers being handled at our airports in financial year 2018/19.
• It is expected to become the third largest by 2024.

Background

• As of last December, Indian aviation completed 52 consecutive months of double-digit growth. The first quarter of 2019, however, took a dip due to the unfortunate situation faced by Jet Airways, resulting in the rise in airfares.
• With the consistent airport development and expansion in airport infrastructure to improve air connectivity for passengers in the tier-II and III cities now, the sector is most likely to continue to witness growth in the years to come.
• In order to ensure that the existing and the upcoming airports are equipped to handle the rising passenger footfall without compromising on the quality of experience, ground handling - including check-in and baggage handling, aircraft handling, servicing and cleaning as well as cargo handling services - is critical.
• It enhances comfort and ensures safety of passengers in addition to securing short turnaround time for flights.
• Identifying ground handling as a core function in the sector, the Ministry of Civil Aviation introduced the draft Civil Aviation Policy in 2015 and issued a notification in 2017 that made modifications to the existing ground handling policy.

Steps taken

• According to the policy, airports with a footfall of over 10 million passengers annually would have three certified ground handling agencies which would include Air India or its subsidiary/joint venture, one of the airport operators and one more to be shortlisted by the airport operator.

Key provisions of the policy

• The policy provisions also prohibit ground handling operations to be carried out by non-certified manpower companies with little or no on-field experience.While the provisions seem perfect to build a structured ecosystem, the policy implementation still waits to see the light of the day at many airports in India.
• Since the announcement of the revision in the ground handling policy in 2017, the frequency of delays in its implementation has been a heated discussion point for the entire sector.
• Currently, there are various hurdles, or rather pitfalls, faced by the aviation sector when it comes to ground handling policy.
• The most critical one being the availability of a fair pool of certified handlers at a major chunk of airports.
• If the policy is implemented, most airlines will partner with certified ground handlers whose core business is ground handling.
• This model, followed globally, will also significantly bring down the number of ground handling units to maximum two to three.

Major impacts

• This will not only enable efficient utilisation of the premium space at the airports but will also ensure optimal and justified use of the ground handling equipment, which otherwise lay idle for most of the hours of the day in case of self-handling.
• Additionally, self-handling carried out by non-bonafide workers, who enter airport for cleaning, cargo and baggage handling and various other activities, poses a huge safety and security hazard for the airports.
• Safety and security of passengers is the utmost responsibility of the airports and can be carried out without a flaw if the policy is implemented as envisaged.
• A MoCA notification in December 2017 gave the airlines a lead time of eight months to dispense with non-certified labour contractors in ground handling services. The deadline has been further extended till June 30, 2019.
• Speedy policy implementation will give a better chance to the certified ground handling agencies to pass on the cost benefits to the airlines, accrued due to the economies of scale and ensure safety of the millions of travellers. And not to miss the timely arrival and departure of the flights.

Conclusion

• In a rapidly evolving aviation landscape, it is expected of the government to create an enabling ecosystem that nurtures and supports the growth of a professionally-driven and responsible ground handling industry.
• The speedy implementation of the policy will prove to significantly sustain the growth of the aviation sector, consistent support from the government and associated authorities will help scale up industry's standard, and set global success benchmarks.

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Prelims Questions:

Q.1) With respect to the draft report of the Internal Working Group on “Comprehensive Review of Market Timings”, released by the Reserve Bank of India (RBI), consider the following statements:
1. It has suggested the currency market hours for both over –the counter and exchange traded to close at 5 pm.
2. Call market timings may be extended till 6:00 pm, co-terminus with RTGS customer window, to facilitate liquidity management by banks.

Which of the statements given above is/are correct?
A. 1 only
B. 2 only
C. Both
D. None

Answer: B
Mains Questions:
Q.1) How to fast-track policy implementation to boost ground handling sector?