Thursday 3 May 2012

Loss incurred by Airlines

Shri Ajit Singh, the Minister of Civil Aviation informed Rajya Sabha today in a written reply that based on returns filed by airlines with Directorate General of Civil Aviation (DGCA), all scheduled airlines operating in the country except IndoGo are incurring losses. The total operational losses for all the airlines for the period 2008-09, 2009-10 and 2010-11 are Rs 19,000 crore approx. and Rs 10,000 crore loss is anticipated in 2011-12. 

The Minister further informed that there is no proposal to provide incentives to private airlines. However, an inter Ministerial Working Group has been constituted under the Chairmanship of Secretary, Ministry of Civil Aviation to identify the factors causing stress in civil aviation and suggest solutions to the same. Finance Secretary; Secretary, Ministry of Petroleum and Natural Gas; Director General of Foreign Trade and Joint Secretary, Ministry of Civil Aviation are members of this Working Group. The Working Group held its first meeting on 21.12.2011. The recommendations made by the Working Group, inter-alia, include rationalization of Value Added Tax (VAT) on Aviation Turbine Fuel (ATF), permission to foreign airlines to invest in the domestic airlines undertakings, allow airlines to import ATF directly for their own consumption, revision of fare structure by airlines so that costs of operations are covered. 

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