The country's booming domestic aviation market presents a strange contradiction. Passenger traffic has been growing in double-digits for 50 months now, making India one of the fastest growing markets. But the airlines are still struggling to make money as the country has one of the lowest airfares in the world coupled with one of the highest cost frameworks.
Each carrier competes with other to attract passengers, many times at fares which are below cost, sacrificing the profits.
Minister of State for Civil Aviation Jayant Sinha said that airfares in India are about Rs 4 per kilometre, less than what it costs to travel in an autorickshaw. He said the government is working on a revival package for the industry, the contours of which should certainly involve offering a lower cost environment for all stakeholders. The Ministry of Civil Aviation, along with the Ministry of Petroleum, has repeatedly petitioned the GST Council for bringing aviation turbine fuel (ATF) under the goods and services tax (GST) so that input tax credit for the fuel is made available. But this request has not been accepted till date. The logic is, if ATF is brought under GST, auto fuels (petrol and diesel) should also be included and the Council currently doesn't have unanimity over this issue.
06/09/18 Sindhu Bhattacharya/DNA
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Each carrier competes with other to attract passengers, many times at fares which are below cost, sacrificing the profits.
Minister of State for Civil Aviation Jayant Sinha said that airfares in India are about Rs 4 per kilometre, less than what it costs to travel in an autorickshaw. He said the government is working on a revival package for the industry, the contours of which should certainly involve offering a lower cost environment for all stakeholders. The Ministry of Civil Aviation, along with the Ministry of Petroleum, has repeatedly petitioned the GST Council for bringing aviation turbine fuel (ATF) under the goods and services tax (GST) so that input tax credit for the fuel is made available. But this request has not been accepted till date. The logic is, if ATF is brought under GST, auto fuels (petrol and diesel) should also be included and the Council currently doesn't have unanimity over this issue.
06/09/18 Sindhu Bhattacharya/DNA
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