Civil Aviation Minister Jyotiraditya Scindia has sounded optimistic over domestic air traffic picking up post the COVID pandemic. Over 3.27 lakh passengers travelled on India’s domestic air routes on October 19, the highest number since the pandemic struck. With Tata’s takeover of Air India and entry of Akasa, the Indian civil aviation space is witnessing a resurgence despite various policy bottlenecks.
While the Union Government has proposed 100 new airports across the country, many airlines in India are in dire straits. Aviation sector expert Dhiraj Mathur pitches for bringing ATF (Aviation turbine fuel) under the ambit of GST and removal of the price cap on air tickets by the government. Urging the Centre to allow fixing of air ticket prices via free-market principles and not artificial distortions, he also stresses on the need for states to ease excise duty and solve land-related issues for airports to reduce cost of business.
While lauding the government for tweaking its terms and conditions to enable Air India’s disinvestment, he reminds that air travel is no longer a luxury like it used to be decades back. Though he admits that the civil aviation sector will always be regulated due to its strategic and security importance, he is of the view that infrastructure creation will act as a tool to fill unutilised capacity of airlines as well as attract investors through better return on investment.
Former Executive Director of Air India, Jitender Bhargava, stresses on need to reduce operational (landing, navigation and parking) charges at Indian airports, along with taxes on ATF, which increase the cost of operations for domestic airlines.
He told ET Now that the characteristic of price sensitivity of most air travellers who get lured by cheap fares rather than the amenities offered is an aspect that can’t be ignored.
However, he also calls for fair and responsible fare structuring by airlines, by not selling seats below the cost of producing a seat in quest of garnering market share. He is of the view that this phenomenon has proved to be disastrous for several airlines, stating that while overpricing of tickets is bad for passengers, underpricing is bad for the financial health of airlines.
