Union Budget 2015: Aviation industry seeks sops for survival


India has the potential to become the third-largest aviation market by 2020 and the largest by 2030, says a FICCI-KPMG report.
According to the report, the Indian civil aviation industry is on a high growth trajectory, albeit with minor hiccups.   “The industry has ushered in a new wave of expansion driven by low cost carriers (LCC), modern airports, foreign direct investments (FDI) in domestic airlines, cutting-edge information technology (IT) interventions and a growing emphasis on no-frills airports (NFA) and regional connectivity,” the report said adding that the industry is amongst top 10 in the world with a size of around USD 16 billion.   However, the aviation industry is facing its own set of challenges.   

Present Challenges/scenario: 

Notwithstanding the extraordinary traffic growth over the past decade, with addition of new airlines like Vistara and Air Asia in the Indian skies last year, the situation is still grim for the sector. Most of them are staring at huge losses.   National carrier Air India is sitting on a pile of massive debt, amounting around Rs 44,000 crore as of FY14. Kingfisher Airlines has been grounded over payment default, while SpiceJet is hoping for a turnaround post a change in management control.  
Industry expectation: 


The last Budget announced schemes for development of new airports in Tier I and Tier II cities. However, the industry has been seeking more sops.    Union Minister of Civil Aviation, Ashok Gajapathi Raju, in a pre-Budget meet with the representatives and stakeholders of the industry, on February 3, held discussions on the problems plaguing the sector.  

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