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The aviation industry is upbeat as the demand is coming back to the pre-pandemic levels. But it feels that a very high taxation rate, increasing fuel costs and poor infrastructure are adversely impacting it.
Chief Executive Officers of top airlines have asked the Union Government to help them survive, become profitable and tap opportunities in the international passenger and freight businesses.
“About 21 per cent of our revenues go straight to the government in various taxes. Which industry in the world produces 21 per cent margin. This is an issue that needs to be addressed.,” Ronojoy Dutta, Director and Chief Executive officer of IndiGo, has said.
Indian economy as a whole and the aviation sector in particular is at the cusp of an exciting growth phase. “Visiting friends and family and mass movement of people in a large country – there are underlying currents of growth,” he said.
“There is no country in the world that does not include ATF under the Central taxation. It is really counter-intuitive to handicap its airlines to charge input tax and say you won’t get input tax credit,” Ajay Singh, Chairman and Managing Director of SpiceJet, has said.
Addressing a CEO Roundtable at the Wings India 2022 in Hyderabad on Friday, he said the aviation industry was chronically ill. “There was a little assistance provided to the aviation sector during the pandemic. “No assistance, high taxation, low yields, shutdown of the sector – it has been extremely difficult,” he said.
He said the industry had met Finance Minister Nirmala Sitharaman and put all these issues before her. “It was a positive meeting,” he said.
There was a huge potential but there was a need to get the basics right without any delay. “You can’t take another 15 years,” he said.
Infrastructure
Ronojoy said infrastructure was very critical for the growth of the industry particularly to tap the opportunities like developing aviation hubs.
The roundtable also felt that there was a huge potential to tap the cargo business. “Our share is just 5 per cent, with the remaining 95 per cent being handled by the international players. We should tap this opportunity,” he said.
Vinay Dube, Founder and CEO of Akasa Air, said that there was a huge demand for cargo services in the country.
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