Mayday for aviation

Context – Aviation Industry need Govt support from Govt for revival

Aviation Industry in India - IATA (International Air Transport Association) Report

• Contribution to GDP: The air transport industry contributes $72 billion of GDP to India. 
• Fastest-growing domestic market: for the 4th year in a row at 18.6% per annum, followed by China.

Aviation Industry in distress 

• Employment risk: 29.32 lakh jobs in the aviation sector are at risk in India.
• Business loss: 40% decrease in air transport business.
• High maintenance Cost: Cost of maintaining Aircraft on Ground is high and nil revenue.
• High impact due to: reduced spending, restricted trade flows, disrupted connectivity, marginal tourism and hospitality, reduced catering and other related reduced supply chain services.

Measures taken all over the World

• Australia, New Zealand and Singapore, have announced relief packages to the tune of $460 million, $360 million and $82 million respectively. 
• USA has reached an agreement in principle with major airlines for a $25-billion-dollar bailout package.

Suggestions to revive Indian Aviation sector

• A moratorium for the next 12 months on all interest on the principal amount of loans without limitations of size or turnover.

• Taxes on Aviation turbine fuel (ATF)

• VAT on ATF by state governments should be rationalised. 
• ATF to be brought under the ambit of 12% GST, with full input tax credit on all goods and services.

• A waiver for private airport operators space rentals and AAI, royalty, landing, parking, route navigation and route terminal changes for the next one year.

• All airlines and aviation-related business must be treated as priority sector lending.

• No loans to airlines and other aviation-related business should be classified as NPAs and no collateral enforced or enhanced during this moratorium. 
• Support the airlines and other-aviation related companies by paying or taking care of salaries of the employees for a period of six months.

Conclusion: Effort, planning and, most importantly, coordination between the aviation industry and the government is imperative to recover from this crisis.