Belying hopes of a recovery, the Economic Survey on Thursday said the civil aviation sector was unlikely to recover from the current slowdown and attain the projected five per cent growth in passenger traffic despite several promotional schemes offered by airlines.

"It was anticipated that during the current year, the impact of September 11, 2001 incident in the United States would start tapering off and the market would show improvement and achieve the projected growth of five per cent in passenger traffic," the Survey, tabled in Parliament, said.

"These expectations have, however, not materialised despite various promotional schemes or fares being offered by airlines operators," it added.

Indian Airlines and private operators, including the two scheduled carriers--Jet Airways and Air Sahara--and 40 non-scheduled operators, provide domestic air services.

Private scheduled and non-scheduled operators cater to nearly 52.6 per cent of the domestic air traffic.

The number of passengers carried by these private operators has increased from 15,000 in 1990 to about 6.7 million in 2001.

The survey noted that the process of divestment in both Indian Airlines and Air-India "has been delayed because of lack of interest on the part of the bidders due to the overall downturn in global economic scenario".

It was increasingly recognised that aviation, from being a mere mode of transportation for a small elite group, makes an important contribution to the national economy and was vital for sustainable development of trade and tourism, the Survey said.

It said that the Airports Authority of India had earned an estimated profit of Rs 176 crored (R 1.76 billion) during April-September 2002, which it attributed to increase in airport charges and cargo income.

This was against a profit after tax of Rs 267 crore (Rs 2.67 billion) achieved in 2001-02 and Rs 214.1 crore (Rs 2.14 billion) in 2000-01.

Stating that the development of airports was no longer domain of the public sector, the survey said the Airport Infrastructure Policy 1997 permitted private equity participation in development of airport infrastructure.

An international airport was successfully constructed and commissioned at Cochin in Kerala with financing from non-resident Indians and loan from financial institutions.

This airport was being managed by Cochin International Airport Ltd in which the Kerala government has a majority stake.

Besides, the transaction structure for restructuring the four metro airports of Delhi, Mumbai, Kolkata and Chennai for making them world class was currently being worked out.

In-principle approval has also been granted for setting up new international airports at Bangalore, Hyderabad and Goa with private sector participation, the Survey said.

These airports would be built under joint venture where the private sector partners would hold 74 per cent equity while the state governments and AAI would hold the balance 26 per cent, it said.

PTI