Indian Aviation industry in 2011

Default, IATA — By on January 20, 2012 at 6:33 am

A v i a t i o n e x p e r t s projected that though air traffic would continue to grow strongly, financial recovery of the airline industry would be slow. The Indian aviation industry faced a paradoxical situation in 2011 suffering huge losses in the face of a burgeoning domestic air traffic, as it battled high fuel costs and fierce competition while looking up to the government for help. With large airlines like Air India and Kingfisher accounting for a major quantum of the industry losses, a Group of Ministers and panel of officers held several meetings to finalise a long-term capital infusion package for Air India. High taxes on jet fuel and equally high airport charges were the major cost heads for the Indian carriers, with the global airlines’ body IATA estimating that fuel costs accounted for 45 per cent of the total costs, compared with 30 per cent for global carriers. The International Air Transport Association (IATA) asked the government to set the country’s aviation industry free from policy interventions like checking airfares and slash taxes, especially on jet fuel. Instead of “micro-managing” the cash-strapped sector, the government should concentrate on building infrastructure and the air navigation system, IATA chief Tony Tyler said. Aviation industry contributes five per cent of GDP in India, nearly Rs 290 crore in taxes, provides four million jobs and another seven million jobs through tourism and related activities, Tyler said. He hoped “these numbers will have a good impact on government policies.” Aviation experts projected that though air traffic would continue to grow strongly, financial recovery of the airline industry would be slow. As the country celebrated 100 years of aviation in India, the Civil Aviation Ministry got a full-time minister Ajit Singh, replacing Vayalar Ravi who held the portfolio as an additional charge, only towards the year-end.

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