Covid, Ukraine-Russia war, currency depreciation caused losses to aviation industry, says Civil Aviation Ministry

New Delhi: Covid-19, currency depreciation, Ukraine - Russia War and increase in crude oil prices have primarily caused losses to the aviation industry in the country during last three years, said the Ministry of Civil Aviation on Thursday.
A member of Parliament in Lok Sabha requested a written reply on whether the Aviation Industry is estimated to report a net loss of Rs.15,000 crore to Rs.17,000 crore during the financial year 2022-2023. Jyotiraditya M. Scindia, Union Minister of Civil Aviation responded that the actual figure of profit /losses to the aviation industry shall be known only when the audited accounts are available at the end of the financial year 2022-23.

He further informed that the losses to the industry were primarily because of disruption during COVID -19 pandemic across the globe, currency depreciation (USD/INR), high operating cost environment, especially due to increase in ATF prices which constitute a major portion of the operational cost of airline, increase in crude oil prices in international market, VAT, Excise duty and Ukraine - Russia War. Airlines were unable to pass full impact of cost increases to the passenger.
The MP asked whether the Government has proposed any sops to make aviation industry profitable and create more employment opportunities in the sector; and if so, the details thereof and the steps taken by the Government in this regard.
He replied that the airlines and major airports are operated by the private sector and they evolve their own SOPs for cost minimisation and profitability.

However, Government has taken various steps to facilitate the airlines. The UDAN Scheme of the Government of India is a game-changer for the aviation industry. The UDAN Scheme or Ude Desh Ka Aam Nagrik, is a regional connectivity scheme that seeks to make air travel accessible and affordable for the masses. The enhanced fiscal support in the form of VGF (Viable Gap Funding), concession on fuel rates, landing/parking charges and the infrastructural development of un-served airports have not only boosted the operations of giant airline companies but has also lead to the participation of regional start-up airlines such as M/s Star Air and M/s IndiaOne Air, and M/s Flybig which are operating exceptionally well.
Other measures taken by the Government including the reduction in Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) were taken up with the state Government / Union Territories levying high VAT on ATF. As a result 16 states have reduced VAT on ATF in the range of 1- 4 percent. Goods and Services Tax on (GST) rate has been reduced from 18 percent to 5 percent for domestic Maintenance, Repair and Overhaul (MRO) services. Airports Authority of India (AAI) and other Airport Developers have targeted capital outlay of approximately Rs. 98,000 crore in airport sector in the next five years for expansion and modification of existing terminals, new terminals and strengthening of runways, among other activities. The government has approved Emergency Credit Line Guarantee Scheme (ECLGS) to the aviation sector. (ANI)