On behalf of FICCI, I welcome you all this morning, to this Inaugural Session of India Aviation 2008.

In a sign of the significance of both this event and the city that is hosting us, we are honored to have with us the Hon’ble Chief Minister of Andhra Pradesh, Dr. Y. S. Rajasekhara Reddy and the Hon’ble Union Civil Aviation Minister Shri Praful Patel. I welcome you and thank you for your presence here this morning.

We also have with us the Hon’ble Minister of State for Defence, Shri Pallam Raju and Hon’ble Minister for HRD, Smt. Purundeshwari Devi. I welcome you and thank you all for your presence here this morning.

It is widely recognized and acknowledged that an efficient Aviation sector has a multiplier effect on the Economy and hence the need for India to have a growing, vibrant and invested Aviation Sector.

These are challenging times for the Aviation sector worldwide and in India, but nevertheless, it’s necessary to appreciate how far the sector has come in the last few years.

Over the last 4 years, the aviation sector in India has been transformed from a sluggish, capacity constrained sector to a competitive sector where consumers are enjoying the benefits of world class product offerings at competitive prices. This competitive structure of airlines along with a low penetration of airline travel amongst Indians has transformed an elitist form of travel to a more widespread and affordable form of travelling. The demand fundamentals for the industry from a forward looking perspective remain compelling and strong and critically have the potential of developing a number of other opportunities around this, including Air Cargo, Terminals, Manufacturing, Technology services and Knowledge industries.

As someone who has written and spoken about Public Policy a lot, I can tell you that the Government policy for Airlines has clearly delivered on the primary objective of any Public policy – competition and consumer benefit. I congratulate the Minister and his team at the Civil Aviation Ministry for architecting this.

However, there are clearly some cracks in the policy that have become obvious with the rapid growth and these need to be addressed if the sector is to continue to grow and the other opportunities are to be realized.

These are:

The current challenging environment for Airlines in India is well known to all. This is not a sustainable situation and needs to be addressed urgently. The cause for this - the high cost structure – most of which have to do with Government taxes, levies – direct and indirect and congested Airspaces and lack of secondary airports as competition.

I accept that taxpayer money can’t bail out the airline sector, but a need to restructure the cost structure is something that MUST be addressed to get a sustainable viability and growth model for the industry. There is no argument to see the airline sector as a source of revenue to the Government, in these challenging times and a struggling sector in the middle of a critical growth phase has ramifications for the entire aviation sector and its consumers.

Secondly, the public policy in the infrastructure space clearly needs re-examining. As I mentioned earlier, the only sustainable way to ensure consumers benefit in India, where regulatory performance has been patchy and inconsistent – is to create a competitive landscape. The conventional wisdom earlier was that these big investments for Airports are difficult to mobilize and hence the argument for monopolies. This is clearly not the case anymore, and so it’s time to re-examine the model of the Airport monopolies in all our cities including the PPP monopolies in Bengaluru, Hyderabad, Delhi and Mumbai. Further in large cities like we have in India, having two or three airports instead of one large Airport are also imperatives of Urban planning and managing Urban growth and transportation investments - OR you will have a situation like in Bangalore where for a 800 Crore private investment, the state investments in connectivity alone will exceed 6000 Crores.

Our national experience with these monopolies has been mixed ranging from outright disenchantment as in Bangalore or dis-satisfaction in the modernization and/or expansion of the others. I have great respect for the Entrepreneurs involved and I am sure they will be the first to accept that its competition and opening up of this sector, that have made them the successful and respected corporate that they are today and am sure they would not oppose competition.

And so if we can fix these growth related aberrations that have crept in, the sector can get back to the business of growing. I have already set out the other aviation opportunities that flow downstream from a strong, viable airline industry like Cargo and Terminals, Manufacturing and Repair, Knowledge Services.

These are all exciting opportunities and require focus to develop. I would suggest a blueprint to be drawn out for them. FICCI is ready to partner with the Ministry to help develop blueprints for these opportunities. Progressive and aggressive states like Andhra Pradesh must seize these opportunities. You need to simply look at examples of Telecom sector where a thriving manufacturing sector has developed on the back of the services business as part of a concerted strategy. Another reference point for aviation manufacturing is the thriving Automobile Engineered Components Industry.

Someone mentioned this morning to me that there is doom and gloom with the current financial crisis around the world etc and is this the time to talk about growth. I believe this is precisely the time to talk about the future – While most of the world is busy clearing up the financial mess that they find themselves in, caused by out of control financial institutions, India must make steady steps at consolidating its growth thus far and building a plan for its next phase of growth and leadership – as a nation and in particular in today’s context the aviation sector. I look to the Minister and his government’s leadership for this.

It is to this objective of ensuring a vibrant and growth aviation sector that the following three days and sessions have been programmed. I wish all attending a successful and fruitful 3 days at this summit of Indian Aviation and thank all of you for being here again.

Thank you,

Jai Hind.