Lok Sabha Question No. 4701 (UNSTARRED), answered on 2022-03-31
Subject: Loss of Indian Aviation Industry
Ministry: CIVIL AVIATION
Asked by: Vijayakumar (alias) Vijay Vasanth

## GOVERNMENT OF INDIA

## MINISTRY OF CIVIL AVIATION Lok Sabha

UNSTARRED QUESTION NO. : 4701

( TO BE ANSWERED ON THE  31st March 2022 )

## LOSS OF INDIAN AVIATION INDUSTRY

4701.    SHRI VIJAY KUMAR (ALIAS) VIJAY VASANTH

Will the Minister of CIVIL AVIATION

be pleased to state:-

- (a)  whether  the  net  loss  of  the  Indian  Aviation  Industry  has  been greatly  increased  due  to  Covid-19  pandemic  and  steep  rise  in  the prices of jet fuel in the recent days due to Ukraine-Russian war;
- (b) if so, the details of losses incurred by the major airlines during the last three years, year-wise;
- (c)  whether  the  Government  proposes  to  provide  any  special package  to  the  aviation  sector  to  cope  with  the  mounting  losses and to protect the industry;
- (d) if so, the details thereof; and
- (e) if not, the reasons therefor?

## ANSWER

Minister of State in the Ministry of (GEN. (DR) V. K. SINGH (RETD))

CIVIL  AVIATION

- (a)  and  (b)  Based  on  the  inputs  received  from  the  major  Indian airlines,  the approximate losses during the last three years are as follows:

| Year    | Loss (Rs. in crores)   |
|---------|------------------------|
| 2018-19 | 10,212;                |
| 2019-20 | 12,729;                |
| 2020-21 | 18,426;;               |

;;

The losses have been caused due to various reasons, including the Covid-19 pandemic.;;;

The approximate price of Aviation Turbine Fuel (ATF) at Delhi is as follows:;

| ; Date             | Price per litre (Rs.);   |
|--------------------|--------------------------|
| 1st January 2022   | 76.1;                    |
| 16th January 2022  | 79.3;                    |
| 1st February 2022  | 86.0;                    |
| 16th February 2022 | 90.5;                    |
| 1st March 2022     | 93.5;                    |
| 16th March 2022    | 110.7;                   |

;

One  of  the  contributing  reasons  for  this  price  increase  is  the Ukraine-Russian war. Since cost of ATF accounts for approximately 40% of  the  operational  cost  of  airlines,  this  price  escalation  may have an adverse impact on the financial results of the airlines.

;;

- (c) to (e) Some of the measures taken by the Government to revive the civil aviation sector include the following:
- (i)  The issue of reduction of VAT on ATF has been taken up with the States/UTs. Till 15th March 2022, the following 12 States/UTs have reduced VAT on ATF:

Andaman & Nicobar  Islands,  Dadar  &  Nagar  Haveli  and  Daman  & Diu,  Gujarat,  Haryana,  Himachal  Pradesh,  Jammu  &  Kashmir, Ladakh,  Karnataka,  Madhya  Pradesh,  Tripura,  Uttar  Pradesh  and Uttarakhand.;

- (ii) To reduce congestion at airports and to address the challenge of sub-optimal  infrastructure,  Airports  Authority  of  India  (AAI)  has taken up development of new and existing airports with a projected capital expenditure of around Rs. 25,000 crores by year 2025. This includes construction of new terminals, expansion and modification of  existing  terminals,  expansion  and/  or  strengthening  of  existing runways,  aprons,  Airport  Navigation  Services  (ANS)  infrastructure, control towers and technical blocks etc.;
- (iii) The Public Private Partnership (PPP) airports at Delhi, Hyderabad and Bengaluru are undertaking major expansion projects of around Rs. 30,000 crores by 2025. Additionally, Rs. 36,000 crores

have  been  planned  for  investment  in  the  development  of  new Greenfield airports across the country under PPP mode.; (iv)  The  Government  has  extended  the  Emergency  Credit  Line Guarantee Scheme to the airlines.  The scheme provides for 100% guarantee  to  member  lending  institutions  in  respect  of  eligible credit  facility  extended  by  them  to  their  borrowers  in  the  civil aviation  sectors,  namely  scheduled  and  non-scheduled  airlines, chartered  flight  operators,  air  ambulances,  airports  and  ground handling units, subject to the conditions mentioned therein. (v) Due to the outbreak of COVID 19, scheduled domestic operations were suspended w.e.f. 25.03.2020 which were subsequently resumed in a calibrated manner from 25.05.2020 with fare capping (lower  and  upper  limit  on  different  sector)  and  capacity  cap  to ensure that airlines do not charge excessive fare and the journey is performed only for essential purpose. The fare band serves the dual purpose of protecting the interests of the travelers as well as the airlines. (vi) Goods and Services Tax (GST) rate has been reduced from 18% to  5%  for  domestic  Maintenance,  Repair  and  Overhaul  (MRO) services. (vii)  A  conducive  aircraft  leasing  and  financing  environment  has been enabled. (viii)  Improvement  in  air  navigation  infrastructure  is  being  carried out to enable better utilization of airspace and airport capacity.

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