Lack of clear policy in aviation causing confusion: CAPA

New Delhi: Major aviation policy decisions in India, like the FDI policy, have often been implemented in an “ad hoc manner” and retraced at times, leading to political controversies, disillusioned investors and industry losses, an aviation consultancy firm said today.

While liberalisation of FDI policy to allow foreign airlines to invest in Indian carriers was a welcome step, “ the manner of its execution has left a lot to be desired,” the Centre for Asia Pacific Aviation (CAPA) said.
“India has made no serious attempt to address the industry’s core structural challenges, particularly the fiscal and cost environment, which is particularly hostile” now due to “stubbornly high fuel prices compounded by a sharp depreciation of rupee and a punitive ad valorem sales tax.”
Wrong signal
In a latest study — ‘India Aviation Outlook Report’ for 2013-14, the Sydney-based firm said that from “confusion” about whether the FDI policy applied only to incumbent carriers or start-ups as well, to the controversy about the allocation of bilateral entitlements, “the end result sends the wrong signal to prospective investors.”
Read News in Full 26/07/13 PTI/Business Line

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