Aviation sector hits Budget airpockets

New Delhi: The Budget 2008-09 has not only avoided providing any significant incentives to the aviation sector, but has also pruned the allocation to the aviation ministry.
The ministry of civil aviation (MoCA) has been allocated only Rs 10,031 crore for coming financial year, compared to Rs 12,347 crore last year.
The finance ministry has also cut the targeted Budget plan outlay for the public sector Air India by around 40% due to the Boeing 787 Dreamliners delivery.
In 2008-09, the National Aviation Company of India Ltd (NACIL), the government-owned company formed after the merger of Air India and Indian Airlines, was supposed to raise Rs 9,572.42 crore from internal resources and external commercial borrowings.
However, with the deliveries of the Boeing Dreamliners getting delayed for this year Rs 3,785.94 crore was deducted from the investment outlay plan. In 2008-09, the investment plan is now being pegged at Rs 5,786.48 crore.
Over and above this the price of ATF has also went up on the day after the budget, but airlines cannot raise prices due to the highly populist railway budget. Aviation turbine fuel (ATF) prices rose by more than Rs 2,300 per kilolitre at the four metro cities. Atf accounts for more than 40% of the airline’s operating cost.
Also the airlines have not cut the fuel surcharge they charge passengers due to variable fuel cost despite the fall in the cost of ATF after December 2007.
05/03/08 Financial Express

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Categories: Indian Aviation- In General Mar 2008