Government Clears Decks for Six New Airlines.

Six new airlines are expected to fly the Indian skies next year, the government said recently as it asked states to join hands to promote regional connectivity and help the aviation sector meet its burgeoning losses by reducing taxes on jet fuel.

Civil Aviation Minister Ashok Gajapathi Raju recently expressed concern at losses being incurred by the Indian aviation sector despite the sector registering a steady growth of 13.8 per cent in the last decade.

Inaugurating a meeting of chief ministers and civil aviation ministers of different states here, Raju said though the rate of growth of the civil aviation sector came down during the last two years due to the overall economic slowdown, it is recovering fast, with the year 2013-14 showing a growth of 6 per cent.

He said a draft aviation policy is being prepared in consultation with the states and suggestions and ideas were being sought to make the policy suitable for the aviation sector.

According to aviation consulting firm Center for Asia Pacific Aviation all Indian carriers together posted losses of $1.7 billion in 2013-14. It is expected to come down to $1.3-1.4 billion this year. The firm also estimates that Indian carriers will require $1.6 billion this year for operations.

Raju expressed concern that despite high growth rates most of the airlines in the country were reporting losses.

He said the aviation industry is seriously affected by high operational costs including cost of aviation turbine fuel, service tax and other charges, shortages of maintenance facilities, high foreign exchange rate, competition from foreign airlines etc. There is a high customs duty on import of private aircraft and helicopters.

He said the aviation industry is now acknowledged as a growth engine, which has a force multiplier effect.


THE NEW INDIAN EXPRESS