India needs to streamline visa, infrastructure to tap tourism potential: Experts

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India needs to streamline visa, infrastructure to tap tourism potential: Experts

As tourism becomes a key driver of the Indian economy with its growing foreign exchange earnings and income generating potential, the government has to streamline infrastructure and visa procedures to tap the segment’s full potential, experts across the industry say.

“Travel and tourism is the second largest employer in India and the second largest revenue earner. It needs no introduction. The country is a continent in itself. But the government has to sort out the visa road blocks and infrastructure loopholes,” Iqbal Mulla, president of the Travel Agents Association of India (TAAI), told IANS on the sidelines of a South Asia Travel and Tourism Exchange (SATTE) business forum.

Mulla said: “India gets the second highest tourist traffic from the UK but the new Indian visa regulations stipulate that a visitor from UK cannot return to India within two months of visiting the country”.

“You need easier visa policy so that foreign tourists can stay longer or return on repeat trips. India cannot be seen in a week’s time,” Mulla said. He said TAAI has taken it up with the tourism and civil aviation ministries.

Like other countries in the west, India too must introduce visa on arrival, Harkripal Singh, chief representative of the TAAI said.

“Security threats are all make-belief. People can stand in queues in airports at metros for their visa,” Singh said.

Pointing to a mismatch between inbound and outbound tourism arising from visa controls and poor infrastructure, Mulla said “outbound tourism was growing by 25 per cent and all tourism boards were buying from India”.

The outbound tourism figure from India is expected to touch 50 million by 2020, estimates by leading South Asian tourism monitors say.

“We are losing foreign exchange because of this huge mismatch between footfalls and growth rate in inbound (nearly 6.28 million foreign arrivals last year) and outbound tourism. Issues like multiple taxes and entertainment licenses are slowing down growth of inbound tourism…if you want to host a dinner at a five star property for a group of foreign tourists, the tour operator has to acquire at least 54 licenses,” Mulla explained.

India should do much more to attract foreign tourists to the country, Timmy S. Kandhari, executive director of leader, hospitality and leisure of PricewaterhouseCoopers, said.

“India gets only 6 million tourists while Istanbul alone gets 13 to 15 million tourists. India lacks infrastructure and rooms. We currently have 120,000 rooms and are short of 150,000 rooms. Land acquisition for new properties is a major problem as well as connectivity to smaller cities,” Kandhari told IANS.

The marketing strategy for India as a destination should also shift from a heritage-culture oriented packages to more experiential itineraries. “Today’s traveller likes to eat, experience and shop,” Rajeev Kohli, joint managing director of Creative Travel Pvt Ltd, said.

The government needs to allocate more for tourism, Nawang Rogzin Jora, the tourism minister of Jammu and Kashmir said. “The ministry allocation of Rs.1,000 crore by the government is pathetic. This shows clearly that there is no appreciation for tourism,” Jora said at SATTE on Saturday.

“International tourist arrival in India is expected to grow with a CAGR of 7.9 per cent for a period spanning 2010-2015. Indian outbound departure is expected to reach 20.5 million by 2015,” Sanjeev Khaira, managing director of the exhibition firm UBM India, said.

UBM-India organised the South Asia Travel and Tourism Exchange (SATTE), a buyers-sellers’ forum, Feb 10-12 in the capital.

Addressing a session, “Tourism: A Driver of Indian Economy”, Khaire said “the strong support from the government on the tourism industry front through investments and the Incredible India campaign attracting more than 750 million in the hospitality and tourism sector were definitely signs of growth that need to be nurtured”.

A research note by the auditing and consulting firm Deloitte Touche observes that the sector is expected to generate around USD 42.8 billion (nearly Rs.1,897.7 billion) by 2017.

The ministry of tourism figures suggest that foreign tourist arrival (FTA) is expected to grow to 10 million by 2010-12 while volume of domestic tourism is expected to increase by 15 percent to 20 percent over the next five years.

Estimates say domestic tourism translates into 700 million footfall in destinations across the country.

Source: IANS

Policy on import of jet fuel silent on logistics

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Wed, 08 Feb 2012 08:18:39 GMT

Policy on import of jet fuel silent on logistics: Experts

Airlines welcomed the decision of a ministerial panel to allow direct import of fuel, but aviation experts said several questions remained unanswered, particularly on logistics, as airports don’t have private fuel storage facilities.

“The news is very positive for the airline industry. But we have to see how the airlines will import the fuel. Do they have the cash to do so,” said Sharan Lillaney, aviation analyst at Angel Broking, reacting to the decision Tuesday.

“There are other questions as well: Where will they store the fuel? Will they use the infrastructure of oil marketing companies? Will oil companies allow that? So, there needs to be clarity on these things first,” Lillaney told IANS.

A group of ministers headed by Finance Minister Pranab Mukherjee Tuesday decided to move the cabinet with a proposal to allow airlines to directly import aviation turbine fuel to help them save on taxes and thereby cut their operational costs.

Several airlines have been facing one of the toughest times and wanted the government to help them out by permitting direct import of jet fuel that was now accounting for close to 50 percent of their operational costs.

‘We have applied officially to the commerce ministry for direct import of fuel. If we import fuel directly for our own use we become an actual user. Therefore, we won’t have to pay sales tax and other levies,’ Kingfisher Airlines chairman Vijay Mallya had said.

According to Amber Dubey, director aviation at global consultancy firm KPMG, airline companies may initially need to depend on oil marketing companies for infrastructure and expertise, since the business of jet fuels is a complex one.

‘Plus, an airline cannot get into trading business and sell the same to other airlines. We are likely to see new models of collaboration between airlines, oil companies and providers of logistical service providers in the near future,’ Dubey told IANS.

At some airports like in Mumbai, there is no scope for private firms, or airlines, to set up additional facilities to store and vend jet fuel due to space constraints. But land is available in some others like in Hyderabad and Delhi, experts said.

At present, the government’s foreign trade policy holds jet fuel as a restricted item for private import, which can only be brought in through authorised companies. It was also not clear if domestic oil retailers can sell jet fuel at international rates.

Source: IANS

Aviation stocks rally after direct jet fuel import allowed

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Tue, 07 Feb 2012 16:03:26 GMT

Aviation stocks rally after direct jet fuel import allowed

Mumbai: Scrips of three listed domestic carriers — Jet Airways, Kingfisher Airlines and SpiceJet — rallied after the government Tuesday allowed airlines to import jet fuel directly.

Aviation stocks rally after direct jet fuel import allowed

The decision on direct jet fuel imports was taken by an empowered group of ministers (EGoM) headed by Finance Minister Pranab Mukherjee.

Analysts said the move, announced by Civil Aviation Minister Ajit Singh, would help airlines to cut 10-15 percent of their operating cost.

The move will enable airlines to directly import jet fuel as an end user, thereby saving sales tax, which ranges between 20-35 percent and is levied by state governments.

The Indian aviation sector been reeling under rising aviation turbine fuel (ATF) prices caused by high sales tax and other levies. Domestic airlines are estimated to have lost around Rs.3,000 crore in the first six months of this fiscal.

Mumbai: Scrips of three listed domestic carriers — Jet Airways, Kingfisher Airlines and SpiceJet — rallied after the government Tuesday allowed airlines to import jet fuel directly.
This is very positive news for the industry. The airlines can be able to save up to 10-15 percent of their operating cost as jet fuel accounts for nearly 50 percent of the cost,’ Sharan Lillaney, aviation analyst, Angel Broking told IANS.

‘The decision will help the airlines to break-even, pay back the oil marketing companies.

The scrip of Vijay Mallya-led Kingfisher Airlines hit an intra-day high of Rs.30.90, up 20 percent from Monday’s close of Rs.25.75 at the Bombay Stock Exchange. The stock was hovering around Rs.28.50 in afternoon trade.

The Jet Airways stock too gained 18.06 percent and touched a high of Rs.351.90 from the previous close of Rs.298.05. The stock was Rs.336.90 around 2.30 p.m.

Budget carrier SpiceJet also gained 19.51 percent at BSE and touched an intra-day high of Rs.29.40 from the previous close of Rs.24.60

Analysts, however, said more clarity was required as to how airlines would manage the logistics of storing and importing fuel.

‘We have to see how the airlines will import the fuel, do they have the cash to do so, where will they store the fuel, will they use the oil marketing companies’ infrastructure or not. So there needs to be clarity on these things first, besides this, the news is very positive,’ said Lillaney.

Airlines have not yet come out with any logistics plan for storing and importing the fuel. This was one of the arguments by the three oil marketing companies Hindustan Petroleum, Indian Oil and Bharat Petroleum, who were opposing the move.

ATF is currently sold at Rs.71,155.22 per kilolitre (kl) in Kolkata, at Rs.67,702.21 per kl in Chennai, at Rs.63,864.31 per kl in Mumbai and Rs.62,907.82 per kl in New Delhi.

The average fuel price in cities like Kuala Lumpur is around Rs.41,000 per kilo litre, followed by Singapore at Rs.42,000 and Dubai at Rs.43,000.

Source: IANS


Aviation Fuel prices down in India

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Wed, 01 Feb 2012 08:27:09 GMT

Jet fuel price cut by Rs 1,974 a kilolitre

State-owned oil marketing companies (OMCs) Tuesday cut aviation fuel prices by Rs 1,974.29 or 3.04 percent a kilolitre (kl), effective from midnight Wednesday, as an appreciating rupee against the dollar made imports cheaper.
With this, the price of air turbine fuel (ATF) at Delhi’s Indira Gandhi International Airport will come down from Rs.64,882.11 to Rs.62,907.82 a kl.

Just a fortnight ago, Indian Oil, Bharat Petroleum and Hindustan Petroleum had raised the price by 2.86 percent or Rs.1,805.44 per kl.

The rupee appreciated to Rs.49.50 per dollar from over Rs.52 per dollar a fortnight ago.

The latest cut is expected to reduce the burden on the aviation industry, with many airlines incurring losses due to the high cost of jet fuel.

“Any reduction in ATF prices is a welcome step. But there is still a long way to go in rationalizing our domestic ATF prices which are nearly 50-60 percent higher than that in our competing markets like Middle East and Southeast Asia,” Amber Dubey, director, aviation, at consultancy firm KPMG told IANS.

The ATF price accounts for nearly 50 percent of the operating cost of an airline. Jet fuel prices also vary from state to state which levy sales tax on the ATF in the region of 3 to 35 percent.

The OMCs revise ATF prices on every 1st and 16th of the month based on the average international crude oil price during the fortnight.

Source: IANS