New Delhi: Air India is being exempted from the new Foreign Direct Investment (FDI) provision as the government has already given Rs. 30, 000 crore to Air India, Aviation Minister Mr. Ajit Singh said while inaugurating the ASSOCHAM 5th international conference of Indian Civil Aviation here in New Delhi today.

 “Aviation Turbine Fuel (ATF) to be got declared as notified product to bring transparency in its pricing and reduction of VAT on ATF by the states”, according to Minister of Civil Aviation.

He further said ministry plans to establish a separate Aviation Security Force (ASF) to further strengthen security in all the 59 airports in the country. This force will replace the Central Industrial Security Force (CISF) to safeguard the airports.

He outlined that India needs lot of efforts and significant investment in the field of development of airport, improvement in connecting infrastructure and better air space management.

“Creation of Civil Aviation Authority to manage the phenomenal growth of air traffic with safety an effective, autonomous and professional regulatory body is required”. He also added that development of world class ANS infrastructure to manage the coming growth phased safely and efficiently, added Mr. Singh.

Minister also said that restructuring of Airports Authority of India into ANS & Civil Wing: to make it more effective, efficient and professional body and also skill augmentation in civil aviation sector through a vibrant, world class aviation education and training.

“The high growth rate of aviation sector in passenger segment is not getting reflected in the financial health of airlines carriers in India. The approximate losses of airlines in the last financial year 2011-12 have been over Rs. 10,000 crores. There are number of structural factors that are responsible for this phenomenon, the operating cost environment is adversely impacting the financial of the airline sector”, he informed.

“Our main focus now is to provide air connectivity to remote and interior areas of the country, North Eastern Region, Tier-II & III cities of India. For this new and innovative solution in the form of Route Dispersal Guidelines, aircraft acquisition and development of low cost airports will put in place”, said Mr. Singh.

He further said that there is a need to develop India as an international hub for the passengers. Action in this regard has been initiated, which includes revisiting the policy regarding bilateral air services agreements with different countries and also rationalization of all bilateral and traffic entitlements on international routes to Indian carriers and rationalization of traffic on domestic routes.

Mr. Singh also said that government has approved TAP & FAP of Air India which include equity infusion, conversion of short term loans to long term loans and issue of government guaranteed NCD’s to raise funds.

During the conference, Mr. Singh along with Mr. Rajkumar Dhoot, President, ASSOCHAM, Mr. K.S. Kohli, Chairman, Frankfinn Group, Mr. Sanjay Varkey, CEO, Shell MRPL Aviation, Mr. Amber Dubey, Partner & Head-Aviation, KPMG, India, Mr. K. Narayana Rao, Chairman, ASSOCHAM Civil Aviation Committee and Mr. D.S. Rawat, Secretary General, ASSOCHAM also released an ASSOCHAM-KPMG study titled ‘Indian Civil Aviation’.

Mr. Rajkumar Dhoot, MP, President, ASSOCHAM said this year has seen some very bold decisions by the Government. These include the opening up of the bilateral to private airlines, direct import of ATF, reduction in import duty of spares, ECB for working capital of airlines, 49% FDI by global airlines, etc. this demonstrates the growing realization of the importance of the aviation sector as a key enabler of economic growth of the country.

M K Narayana Rao, Chairman of ASSOCHAM’s civil aviation committee, “To overcome the prevailing challenges and accomplish the above vision, long term sustainable policy guidelines, effective implementation of ATF imports, further penetration of air-travel to suburban cities, coupled with entry of foreign players in the space could prove to be the game changer for both Airports Operators and Airlines”.

Mr. Amber Dubey, Director at KPMG (India), said the industry and the government must tackle policy and regulatory challenges. The year has also seen challenges in terms of high fuel cost, high airport charges and declining traffic. The sector needs more initiatives in areas of taxation, regulatory clarity, infrastructure development and capacity building.

Religare was given the award for being the most versatile company in aviation, SafeExpress, the best air cargo logistics, ‘Airbus’ the best global aviation company, Indigo, the best Airline (national) and “Emirates”, the best Airline(International) and Franklinn, the best training institute.