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Industry players are now preparing to air their concerns at the CEOs’ conclave scheduled with civil aviation minister Hardeep Singh Puri on Saturday at the civil aviation summit — Wings India 2020 — being held in Hyderabad. Airlines are seeking incentives including a significant slash in taxes on aviation turbine fuel (ATF) and waiver or reduction in landing and parking charges, among others, said the civil aviation joint secretary Usha Padhee. “There has been a lot of reduction in (air) traffic. There has been (an) indirect impact. (Now) we have shut down. So automatically, the number of people who travel will come down. If all travel visas are canceled, then whoever was supposed to come to India would not come”, she told
ET on the sidelines of the summit. “It’s a huge impact on the entire (economy), whether it is airlines or tourism sector. Certainly, it will have an impact on the economy but we have to find a way to brace for it.”
Many economies have been coming up with various initiatives to bail out the airlines in their respective countries and are seeking to know from India if any remedies are being planned to bail out carriers here. “The airlines have been discussing with the (aviation) secretary regarding the (financial) support that they can get,” said Padhee, adding that the carriers were worried about their cash flows getting squeezed.
Civil aviation is a high maintenance industry requiring adequate cash flows for operations and airlines are worried about the shrinking numbers that have forced them to shut down some routes, she said. Some airlines are seeking a reduction in the tax on ATF — especially the excise duty that is in the domain of the Union government to bring it on par with the tax rates applicable to UDAN (Ude Desh ka Aam Naagrik) scheme routes. At present, the Centre levies 2% excise duty on ATF under the UDAN scheme, compared with 12% charged on other carriers.
The airlines are seeking such a remedy since “automatically their operational costs will come down,” Padhee said.
Further, she said some airlines are seeking remedies in the form of waiver or a reduction in landing and parking charges at airports.
“If we waive off (landing and parking charges), airport operators’ revenue will be affected. We need to see the issue in a holistic manner and decide,” said Padhee. Though 90% of the country’s airports are owned by state-run Airports Authority of India, the major 6-8 airports that account for 50% of overall air travel are in the hands of private players, she pointed out.
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