New Delhi: Union Civil Aviation Minister Jyotiraditya Scindia on Thursday told the Lok Sabha that the aviation industry incurred a total loss of Rs 28,907 crore between 2019 and 2021. Breaking off the stated loss, he said in his written reply that Rs.4770 crore were lost in 2019, Rs.12,479 crore in 2020, and Rs. 11,658 crore in 2021.
Scindia in his reply pointed out 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 the international market, VAT, Excise duty and Ukraine - Russia War," adding that the airlines were unable to pass the full impact of cost increases to the passenger.
On steps taken to make the aviation industry profitable and create more employment opportunities, the Union minister said airlines and major airports are operated by the private sector and they evolve their own SoPs for cost minimization and profitability. However, the government has taken various steps to facilitate airlines. The UDAN Scheme is a game-changer for the aviation industry, he pointed out.
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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. Scindia further added that 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 have also led to the participation of regional start-up airlines such as Star Air and IndiaOne Air, and Flybig which are operating exceptionally well.
Other measures taken by the Government included the reduction of VAT on Aviation Turbine Fuel (ATF) taken up with state governments/union territories levying high VAT on ATF which has led to 16 states including Himachal, Jammu and Kashmir, Ladakh, and others reducing the VAT in the range of 1-4 percent.
To a question on whether the Aviation Industry is estimated to report a net loss of Rs. 15,000 to Rs. 17,000 crores during the financial year 2022-2023, Scindia in his written reply noted that "the actual figure of profit/losses to the aviation industry shall be known only when the audited account is available at the end of the financial year 2022-23."
