Gujarat Needs An Aviation Policy That Involves All Stakeholders

Sources, on condition of anonymity, have now stated that the state government is likely to promulgate a civil aviation policy to further strengthen regional connectivity within the state. With significant action being taken towards starting intra-state air services, Gujarat's tourism economy is also expected to develop significantly. 

Gujarat's rise as an industry leader began with then Chief Minister and current Prime Minister Narendra Modi launching the annual Vibrant Gujarat Summit to attract investment to the state. But till date, the state lacks an aviation policy, where states like Rajasthan, Andhra Pradesh, Odisha and Uttar Pradesh already have one.

Need For Policy

Various stakeholders in Gujarat's aviation sector are now expressing the need for a cohesive policy for streamlined development of the sector in the state. "The policy should look to reduce the tax burden on chartered flight operators and aircraft management companies to address the unique challenges of India’s aviation ecosystem. By focusing on VAT/GST rationalisation, infrastructure development and operational incentives, Gujarat can position itself as a model state for aviation growth, attracting investments and fostering a robust aviation industry," said Rajesh Rajan, CEO and founder, IndiaJets. 

In 2023, the Airports Authority of India had signed MoUs to develop 11 greenfield airports in Gujarat, including Ankleshwar, Morbi, Rajpipla, Botad, Dwarka, Dhordo, Rajula, Dahod, Ambaji, Dholavira and Palitana. 

Meanwhile, the state government is building air strips in different areas, providing flying training, and providing benefits and incentives to start chartered flights to remote areas. Over the last few years, due to the state aviation department's liberal policy, more intra state short-haul flights are becoming operational, including direct flights between Ahmedabad and Rajkot, Surat and Kandla, etc. The state government is also providing helicopter and air ambulance services.

Fast-Track Aviation In Gujarat

Introducing a dedicated policy at this time could fast-track the sector’s development in the state, as it would open up many avenues for employment and aviation-related infrastructure projects. Various benefits, including subsidies and incentives, could be announced, which will encourage other big players to invest in Gujarat.

Intra-state air connectivity would directly benefit its citizens and boost the business appetite of entrepreneurs in the state, saving them time spent commuting between cities.

In an exclusive interaction with The Secretariat, U K Bose, aviation consultant and ex-CEO of Air Sahara, said India's aviation is the third-largest growing market in the world, and has seen major progress in the last 10 years. He added that a state policy would promote regional connectivity to underserved regions, encourage private sector participation in airport development, and modernisation.

Government officials acknowledge that the current aviation scenario in the state is unorganised and needs intervention that will benefit stakeholders manifold, even inviting investment from players from other states and abroad.

Currently, the Tata Group is the only major player operating in Gujarat's aviation sector, along with small companies that provide helicopter services. Considering the number of high net-worth individuals (HNIs) residing in Gujarat, an aviation policy could open doors for a flourishing chartered flights industry, feel experts. 

The policy should keep in mind the state's business and tourism hubs, boost regional connectivity, promote helicopter services, reduce operating costs of airlines by reducing taxes, and make Gujarat a hub for maintenance, repair and operation services for aviation infrastructure.

Attention should also be paid to encourage tourists to choose flight travel within the state, for which, the common complaint of cancellation fee charges that exceed the base fare should be addressed, and the possibility of refunding the entire amount exceeding the fixed price be considered. 

To formulate such a policy, experts urge the government to take the opinions and suggestions of various stakeholders, by holding meaningful dialogues to discuss the current challenges and problems, benefits and land incentives that need to be given, etc. It can start with a comprehensive study of the aviation policies of other states, to understand the dynamics of such a policy.

Roadblocks Faced By Industry

The state will also need to facilitate a smoother functional roadmap for the stakeholders. A senior official from Tata, which is establishing a major aircraft manufacturing plant in Vadodara, has revealed that the Gujarat government hasn't yet consulted them regarding the yet-to-be-unveiled aviation policy.

Speaking on condition of anonymity, the official expressed surprise at the government's lack of engagement, adding, "We were not consulted about the new aviation policy. Currently, Karnataka, Tamil Nadu and Telangana have aviation policies favourable to stakeholders, involving thousands of small- and medium-sized enterprises (SMEs) that manufacture components for aircraft and helicopters. Even though Karnataka's policy is quite progressive, the state continues to seek suggestions from various companies to further improve their policy."

The official further said, "Draft policies are shared with companies for feedback. Our experience in Karnataka has been far more positive. For instance, if we need to meet an official in Karnataka, we could easily schedule an appointment and get our queries addressed promptly. In Gujarat, it's challenging to even get an appointment with senior officials. And even if we manage to meet them, our issues often remain unresolved." 

The Tata official went on to say that aviation requires substantial investments and a long-term commitment, with the often lengthy approval process detering smaller players and favouring larger conglomerates.