Restrictions on utilisation of Indian air space to be eased for efficient flying of civilians

Union Finance Minister Nirmala Sitharaman on Saturday announced the easing of restrictions on utilisation of Indian air space, benefiting civil aviation sector by about Rs 1,000 crore per year.

Announcing the fourth tranche of economic stimulus, she said only 60 per cent of Indian airspace is freely available. More air space available would reduce travel time and save on fuel, she said. The FM added that this will also bring about a positive environmental impact.

The finance minister said six more airports will be auctioned for private participation.

The annual revenue of six airports in the first round is Rs 1,000 crore (against the current profit of Rs 549 crore per year). The Airport Authority of India (AAI) will also get a down payment of Rs 2,300 crore.

Also, an additional investment of Rs 13,000 crore will be made by private players in 12 airports auctioned in first and second rounds.

She also said tax regime for aircraft Maintenance, Repair and Overhaul (MRO) has been rationalised. 

Aircraft component repair and airframe maintenance are expected to increase from Rs 800 crore to Rs 2,000 crores in three years, she added.

Major engine manufacturers in the world would set up engine repair facilities in India in the coming year. Convergence between the defence sector and the civil MROs will be established to create economies of scale. The maintenance cost for airlines will come down.