Government promises to fix issues plaguing Indian airline industry

Civil aviation minister Hardeep Singh Puri meets Managing Director of Kotak Mahindra Bank Uday Kotak during the Confederation of Indian Industry (CII) National Council Meeting in New Delhi (Photo: PTI)

NEW DELHI: Civil aviation minister Hardeep Singh Puri on Friday promised to help airlines tide over the problems affecting the aviation industry’s growth.

“We have some turbulence in the sky. But I am confident we can meet that turbulence and turn it around,” Puri said at a conference organized by industry chamber Confederation of Indian Industry (CII).

The aviation industry’s growth in recent months has been crippled by a sudden reduction in capacity after Jet Airways (India) Ltd suspended operations in April. In an apparent reference to the tax levied on aviation fuel, the minister said domestic airlines need to be given a level playing field with their overseas counterparts. Domestic carriers pay 11% excise duty on jet fuel, but do not get credit for it in the final tax liability on air-fare charged to the consumer in the form of GST, as both are different streams of indirect taxation. This lack of tax credit works as an additional cost to domestic airlines. The civil aviation ministry has been batting to include jet fuel in GST.

Puri also said that the aviation sector has tremendous promise that needs to be exploited. “It (aviation) is a sector which I believe has tremendous potential and we have every intention to exploit that potential to make it grow and, in the coming years, we (can) become a leader in that sector. There are many mistakes we have made in the past. We need to correct those. We need to give domestic carriers a level playing field.”


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