Wednesday, January 23, 2013

Aviation industry: Buffeted by ground realities


Indian aviation, the ninth largest market in the world, has significantly contributed to business, trade and tourism growth in the past decade.
The paradox of the sector, which serves one of the world’s fastest growing economies and registered unprecedented growth in traffic, is that almost all Indian carriers are in the red.
Transportation is one of the most important wheels of growth in any economy, and air travel is no longer an elitist luxury but a necessity. The sector has been impacted by several factors including high operating costs fuelled by high oil and tax cost, cash crunch and soaring debts.
Recently, the Government opened up FDI in Indian carriers to foreign airlines and also allowed direct import of aviation turbine fuel (ATF).
Responding to this, R. Neelakantan, Chief Financial Officer, SpiceJet said, “Permitting FDI by foreign airlines was a right step for Indian aviation, as it requires resources for expansion to connect Tier II and III cities with metros and foreign destinations. Further, the Government has been proactive in helping the industry directly import the required ATF.”
23/01/13 Pallavi J Bakhru/Business Line
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