India's aviation sector suffered Rs 11,658 crore loss in FY22, as per the Civil Aviation Ministry. The losses were mainly covid-induced, while factors such as currency depreciation and high operating cost triggered by ATF prices also played a role. Increase in crude oil prices in international market, excise duty, and the ongoing Ukraine-Russia war, further increased pressure.
Airlines couldn't pass on higher costs to passengers, leaving them in a tight spot. The private sector now operates airlines and major airports, and creates its own SOPs for minimising costs and increasing profits.
The government has also taken measures to help airlines, such as the UDAN Scheme, which is a game-changer for the sector. Also known as Ude Desh Ka Aam Nagrik, boosts regional connectivity by making air travel accessible and affordable for common people.
Apart from that the Government reduced VAT on Aviation Turbine Fuel (ATF), allowing 16 states to reduce the levy in the range of 1-4 per cent.
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