Lok Sabha Question No. 2593 (UNSTARRED), answered on 2023-03-16
Subject: Loss to Aviation Industry
Ministry: CIVIL AVIATION
Asked by: Kamlesh  Paswan, P.R. Natarajan, Balubhau (Alias Suresh Narayan) Dhanorkar

## 2593.

## GOVERNMENT OF INDIA

## MINISTRY OF CIVIL AVIATION LOK SABHA

UNSTARRED QUESTION NO. : 2593 (To be answered on the 16 th  March 2023)

## LOSS TO AVIATION INDUSTRY

SHRI KAMLESH PASWAN SHRI NATARAJAN P.R. SHRI BALUBHAU ALIAS SURESH NARAYAN DHANORKAR

Will the Minister of CIVIL AVIATION

Minister of CIVIL AVIATION

be pleased to state:-

- (a) whether the Aviation Industry is estimated to report a net loss of Rs. 15,000 to Rs. 17,000 crore during the financial year 2022-2023;
- (b) if so, the details thereof;
- (c) the details of the loss incurred by the industry during the last three years, year-wise along with the reasons therefor;
- (d) whether the Government has proposed any sops to make the aviation industry profitable and create more employment opportunities in the sector;
- (e) if so, the details thereof and if not, the reasons therefor; and
- (f) the steps being taken by the Government to make the aviation industry profitable?

## ANSWER

(Shri Jyotiraditya M. Scindia)

(a) & (b) The actual figure of profit / losses to the aviation industry shall be known only when the audited account are available at the end of the financial

year 2022-23.

(c) Based on the information available with the Ministry, the details of losses incurred by the industry during the last three years are as follows:

Year        Total Operating Results        Profit or Loss

(Total Operating Revenue-    after tax and Total Operating Expenses)     after extra ordinary items FY 2019-20             (-)5534                   (-)12905 FY 2020-21            (-)14871                  (-)17914 FY 2021-22            (-)13189                  (-)24015

The losses to the industry were primarily because of disruption during COVID -19 pandemic across the globe, currency depreciation (USD/INR), high operating cost environment, especially due to increase in ATF prices which constitute a major portion of the operational cost of Airline, increase in crude oil prices in international market, VAT, Excise duty and Ukraine Russia War. Airlines were unable to pass full impact of cost increases to the passenger. (d) to (f) The airlines and major airports are operated by the private sector and they evolve their own SOPs for cost minimisation and profitability. The measures taken by the Government include: I) The reduction in Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) was taken up with the State Government / Union Territories levying high VAT on ATF. As a result, VAT on ATF has been reduced by 19 States/ UTs whose details are annexed. II) Goods and Services Tax on (GST) rate has been reduced from 18% to 5 % for domestic Maintenance, Repair and Overhaul (MRO) services. III) Airports Authority of India (AAI) and other Airport Developers have targeted capital outlay of approximately Rs. 98,000 crore in airport sector in the next five years for expansion and modification of existing terminals, new terminals and strengthening of runways, among other activities. IV) Government has approved Emergency Credit Line Guarantee Scheme (ECLGS) for the aviation sector. Based on the industry demand, the scope of ECLGS has been enhanced to provide credit support to these companies upto 100% of their total credit outstanding (both fund based and non-fund based outstanding) as on reference dates, subject to a cap of Rs. 1500 crore per borrower, whichever is lower.

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## STATETMENT REFERRED TO IN REPLY OF LOK SABHA UNSTARRED QUESTION NUMBER 2593 FOR ANSWER ON 16.03.2023

ANNEXURE

VAT on ATF Recent reduction by States/ Union Territories (UTs)

|   Sl No | State/ UT                              | VAT Reduction                           | Date of Notification    |
|---------|----------------------------------------|-----------------------------------------|-------------------------|
|       1 | Andaman & Nicobar Islands              | From 10% to 1%                          | 23/09/2021              |
|       2 | Uttarakhand                            | From 20% to 2%                          | 30/09/2021              |
|       3 | Jammu & Kashmir                        | From 26.25% to 1%                       | 11/10/2021              |
|       4 | Ladakh                                 | From 26.25% to 1% for civilian aircraft | 27/10/2021              |
|       5 | Himachal Pradesh                       | From 25% to 2%                          | 11/11/2021              |
|       6 | Tripura                                | From 16% to 1%.                         | 17/11/2021              |
|       7 | Madhya Pradesh (Bhopal & Indore)       | From 25% to 4%                          | 22/11/2021              |
|       8 | Haryana                                | From 20% to 1%                          | 23/11/2021              |
|       9 | Karnataka                              | From 28% to 18%                         | 22/12/2021              |
|      10 | Uttar Pradesh                          | From 21% to 1%                          | 03/01/2022              |
|      11 | Gujarat                                | From 25% to 5%                          | 04/01/2022              |
|      12 | Dadra and Nagar Haveli & Daman and Diu | From 20% to 3%                          | 03/02/2022              |
|      13 | Arunachal Pradesh                      | From 20% to 1%                          | 10/04/2022              |
|      14 | Manipur                                | From 20% to 1%                          | 03/06/2022              |
|      15 | Jharkhand                              | From 20% to 4%                          | 14/06/2022              |
|      16 | Mizoram                                | From 10% to 1%                          | 13/07/2022              |
|      17 | Goa                                    | From 18% to 8%                          | 02/01/2023              |
|      18 | Rajasthan                              | From 26% to 2%                          | 10/02/2023              |
|      19 | Maharashtra (Mumbai, Pune and Raigad)  | From 25% to 18%                         | Announced on 09/03/2023 |