HYDERABAD: Domestic air traffic will see a drop of 15 to 20 per cent on account of Coronavirus outbreak, said Hardeep Singh Puri, Minister for Civil Aviation. Yet, he ruled out a bailout package for airlines and instead suggested them to approach oil companies for a 30-day credit supply of Aviation Turbine Fuel (ATF).
ATF accounts for 40 per cent of an airline’s expenditure and any slowdown in air traffic sans relief on ATF taxes may adversely impact revenue of air carriers. Speaking at the ongoing Wings India 2020 here on Saturday, Puri said he also requested the Oil Ministry to adopt a 15-day price adjustment for ATF pricing instead of 30 days given global crude prices are seeing a sharp correction.
Outbreak will cause short-term economic disadvantage: Aviation Min
Besides, he also spoke to Finance Minister Nirmala Sitharaman and the GST Council to possibly bring ATF under the fold of GST. Such a move could mean a uniform tax rate as against the current practice of centre and state levies. “We are at a point where we need to bring ATF under GST and by and large there is acknowledgement from across states to make it happen,” he said. Admitting that the Coronavirus outbreak will cause ‘some economic disadvantage,’ Puri said it was only a passing phase, which India will overcome and take advantage of the opportunities arising out of the global challenge.
“In a country of nearly 1.30 billion people, we have 80 positive cases. Many of them are going to be okay, we may add some but looking at that perspective we will not only overcome the challenge, but I see robust and vibrant growth in the civil aviation sector,” he said. Puri said India was on course to emerge as the third-largest civil aviation market and the number of air passengers will likely go up from current 345 million passengers per annum to one billion by 2030. But given the penetration and double-digit growth, he hoped that the “one billion passenger target will be achieved much before, say by, 2024-25”.
Stating that the Indian airports constitute a global benchmark on how airports should work during such pandemic situations, Puri said the country had so far screened 10,876 flights or about 12 lakh passengers, of which 3,225 required further screening.
Key focus areas
Meanwhile, speaking earlier at the event, KT Rama Rao, Minister for Industries & Commerce, IT&C, Government of Telangana, underscored two key areas where the State would focus on. “With respect to aviation and aerospace, there has been tremendous growth with further room to grow for us. Our focus should be on skill development and MRO infrastructure and foreign investments... The MRO sector has a huge potential for employment generation along with significant investments from overseas. We are working together to bring in reforms and policies that will enable us to bring in more employment opportunities for young India,” he noted.
Increased focus on MRO infrastructure building will lead to Indian aircraft being serviced completely in India. By 2040, the Ministry of Civil Aviation along with FICCI targets complete component manufacturing and MRO services from the country. According to Anand Stanely of Air Bus, domestic traffic grew 1,400 per cent or 14 times in the last 18 years. Though ‘the elephant in the room,’ is the Coronavirus, Stanely said, the aviation industry’s future in terms of connectivity is promising.