Badly hit by the COVID-19 pandemic, the Indian aviation sector has raised a slew of demands ranging from help with salary payouts to tax breaks from the government.
The aviation sector, in multiple representations to the Indian Ministry of Civil Aviation over the past few weeks, has impressed upon the government to help out the airlines with the payment of staff salaries, exemptions of airport charges, and the inclusion of aviation turbine fuel under the Goods and Service Tax (GST) to lower the fuel cost.
Confirming the receipt of representations from the aviation industry, a top source in the Ministry of Civil Aviation said: "A number of suggestions have been received from the industry. Demands pertain to relief such as provision of credit with interest subvention so that the airline companies could meet expenses like salaries".
The other demands that the aviation sector has put forth are related to excise duty cuts on aviation turbine fuel and inclusion of aviation fuel under the GST. The inclusion of aviation fuel under the GST would decrease the tax incidence on fuel and reduce its prices.
A number of airlines in the private sector in India have already announced measures such as salary cuts in the wake of the COVID-19 pandemic, as aviation, apart from the hospitality and tourism sectors, has been one of the worst affected areas.
While no sector will remain untouched by the pandemic, aviation, hospitality and tourism are likely to be some of those worst hit.
India's aviation sector is projected to contract in the financial year 2020-21 (April 2020-March 2021) and airlines will see deep financial losses, suggests a recent report from a research agency.
In one estimate, the Indian aviation industry is likely to experience a loss to the tune of $3-3.6 billion between April and June this year.
"Domestic traffic is expected to decline from an estimated 140 million in financial year (FY) 2020 (April 2019-March 2020) to around 80-90 million in FY2021. International traffic is expected to fall from approximately 70 million in FY2020 to 35-40 million in FY2021", aviation consulting and research data firm Centre for Asia Pacific Aviation (CAPA) in India said in a report titled "COVID-19 and the State of the Indian Aviation Industry" earlier this month.
The report also points out that aviation companies will have 200-250 surplus aircraft over the next 6 to 12 months, due to a sharp decline in travel.
