India's aviation sector would see investments to the tune of $50 billion (about Rs 228,800 crore) in the next 10 years, mainly in the form of airport infrastructure upgrade and fleet acquisition by carriers, Civil Aviation Minister Praful Patel has said.
"In the next five years, the sector will receive about $30 billion (about Rs 137,280 crore) in investments. The investment will be done by the private sector as well as the government," Patel said at the Economic Editors' Conference in New Delhi on Friday.
He said the domestic aviation sector was expected to grow at 25-30 per cent this year and at least 20 per cent in each of the subsequent five years.
Indian public sector carriers, Air India and Indian Airlines, will offload about 20 per cent of equity in the proposed initial public offer, slated to hit the market in the first quarter of 2006.
"Not more than 20 per cent of equity will be offered in these two carriers. Their public sector status will be maintained," Patel said, adding that their employees would be given stock options.
He said, "The two airlines need more financial muscle and more equity. We cannot just do with the equity injected by the government if they have to face heightened competition."
The government is also working on a strategy to ensure greater synergy between Indian Airlines and Air India to face the challenges thrown up by private sector carriers.
"Even in the domestic aviation scene, consolidation talks are on among some private airlines," he said.
Air India's fleet acquisition plan for 50 Boeing aircraft and another 18 for its subsidiary Air India Express would be taken up by the Cabinet Committee on Economic Affairs.
Patel said the Airports Authority of India would raise about Rs 6,000 crore and undertake modernisation of 35 non-metro airports across the country at one go.
Work on these airports would begin in 2006-07 and end by 2008-09, he said, adding that discussions were on with the Planning Commission over the ways in which resources could be mobilised for the purpose.
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