Airlines in India would need a massive dose of support from the Government of India to survive the ongoing crisis in the civil aviation sector.

The crisis has arisen out of three current factors – rising costs, overcapacity of seats in the different airlines during the last few years and the remarkable decline in passenger traffic due to economic recession, comparative rise in airfares and last but certainly not the least, competition from railways and other means of transport.

The airlines are expecting relief to be provided by the inter-ministerial team set up to look into the problems of the industry. The Government had set up the inter-ministerial committee in June this year as international crude prices shot up uncontrollably.

Several representations have been received by the committee seeking concessions in the airport charges, reduction in sales tax on aviation turbine fuel which is charged at different rates by the different states. It ends up making aviation turbine fuel the most expensive item in India. The representation from small and medium airlines have also sought withdrawal of tax on leasing planes.

However, the government has not yet taken a call on it as it expects that the global recession and drop in tourist traffic from other parts of the world would soon level out, possibly by the beginning of the first quarter of 2009-10.

EMAIL THIS NEWS COMMENTS No comments yet