With the government allowing 49 per cent FDI (foreign direct investment) in aviation sector, the focus will now be on encouraging use of smaller aircraft to connect Tier-I, Tier-II and Tier-III cities with metros, according to Union Civil Aviation Minister Ajit Singh.
“No doubt the aviation sector is going through a difficult phase. The decision to allow 49 per cent FDI will certainly push things in the positive direction. I am looking towards entry of smaller aircraft to serve new destinations in India’s Tier-I, Tier-II and Tier-III cities which hold a great potential. We are looking towards connecting these cities with metros. We have to tap the vast middle class segment, which wants to travel by air. We will urge the airlines to make connectivity with such cities to tap this potential,” Mr. Singh said on the sidelines of an Assocham conference on Indian civil aviation sector here.
To a question, Mr. Singh said only time would tell how many foreign airlines would show interest in acquiring stake in domestic carriers. Nevertheless, he felt, the mood was upbeat. Allowing FDI in aviation would pave way for much-needed equity infusion in Indian carriers, which were in dire need of funds, he added.
He said he would bring a Bill in the winter session of Parliament to set up of a Civil Aviation Authority which would revamp the aviation regulator, Directorate-General of Civil Aviation . The government was also working on constituting a dedicated civil aviation security force, as the Central Industrial Security Force, currently looking after aviation security, was formed for a different purpose. He said the government was looking at replicating the public-private-partnership model to develop airports in small cities. There was also a need to build low-cost airports at smaller cities.