Bengaluru: Relief for the struggling aviation sector was restricted to state-owned assets and plans. Though major players in the industry have been seeking relief to ease the burden of mounting losses, the Union Budget had little to offer to private carriers.
The Budget allocated `2,500 crore to feed the ‘insatiable appetite’ of national carrier, Air India. This is part of the `30,000 crore phased fund infusion into the carrier till 2021.
Though discounts for economy classes have been aplenty in recent times, first and business class passengers will now have to cough up 2 per cent more as service tax. Though various states continue to oppose the current GST provisions, aviation companies continue to post losses as Aviation Turbine Fuel (ATF) is taxed heavily, which accounts for nearly 40% of the operational costs.
“Disappointing day for aviation. It’s as if aviation is not even a consideration. It’s wrong image as a ‘playground of the rich’ makes it a low priority item,” Amber Dubey, partner and India head of aerospace and defence at KPMG said.
Desi carriers have to look for Maintenance Repair and Overhaul (MRO) outside India as well as higher taxes. Though MRO spend is expected to grow to about $1.6 billion (spending each year) in the next 10 years from the current market size of about $700-800 million, it still remains largely unexplored.
01/03/15 Sharan Poovanna/New Indian Express
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The Budget allocated `2,500 crore to feed the ‘insatiable appetite’ of national carrier, Air India. This is part of the `30,000 crore phased fund infusion into the carrier till 2021.
Though discounts for economy classes have been aplenty in recent times, first and business class passengers will now have to cough up 2 per cent more as service tax. Though various states continue to oppose the current GST provisions, aviation companies continue to post losses as Aviation Turbine Fuel (ATF) is taxed heavily, which accounts for nearly 40% of the operational costs.
“Disappointing day for aviation. It’s as if aviation is not even a consideration. It’s wrong image as a ‘playground of the rich’ makes it a low priority item,” Amber Dubey, partner and India head of aerospace and defence at KPMG said.
Desi carriers have to look for Maintenance Repair and Overhaul (MRO) outside India as well as higher taxes. Though MRO spend is expected to grow to about $1.6 billion (spending each year) in the next 10 years from the current market size of about $700-800 million, it still remains largely unexplored.
01/03/15 Sharan Poovanna/New Indian Express
