Over-taxation, lack of infrastructure hamper growth of aviation sector
Recently, a report took stalk of the Aviation sector. Its findings were:
- The industry’s lack of competitiveness at the global level is due to the devastating impact of high taxes (among the top 10 in the world).
- Growth opportunities in this sector are :
- Indian carriers are expected to double their fleet size by 2020 to 1,000 aircrafts
- opportunity for maintenance, repair and overhaul (MRO) business
- total manpower requirement of airlines was estimated to rise from 62,000 in 2011 to 117,000 by 2017
- Taxes on aviation turbine fuel & MRO, service tax on air tickets & high airport charges need a re-look.
- The industry has started in a new wave of expansion driven by
- low cost carriers (LCC)
- modernizing airports
- foreign direct investments (FDI) in domestic airlines
- cutting-edge information technology (IT) interventions
- growing emphasis on no-frills airports (NFA)
- Regional connectivity will trigger next generation of aviation growth through connecting Tier II & Tier III cities.
- Indian airlines carried out 5-10 % of MRO work in India & rest was outsourced to third-party service providers.
- The government has decided to set up an inter-ministerial task to increase MRO revenue, foreign exchange, regional airports and jobs to meet the demands of the future(2020).
- Reasons for Losses in Aviation Sector
- Expansion measures in Aviation sector
- Growth opportunities in Aviation
- Regional cconnectivity