The aviation sector, which is projected to post losses of Rs 8,000 crore for FY09 is high on hopes from the upcoming Union Budget 2009-10.

The sector in a business restructuring mode to spike up their bottom-line, wants the government to rationalise taxes on aviation turbine fuel (ATF) by bringing it under the ?declared goods? category so that it attracts a uniform tax of 4% pan India. Currently, taxes on ATF is anything between 29-35% in different states. The Andhra Pradesh government has, however, brought down its sales tax on ATF from 33% to 4%.

The sector wants the government to trim down airport charges, which currently are 70-80% higher than the international standard. The sector, which has been lobbying hard for formation of policies to allow foreign direct investment (FDI) in the sector, wants the government to take a decision on the same. Currently, FDI is not allowed in airlines but carriers which have been posting losses in the past few financial quarters have been looking at foreign investors for a turnaround. The overall air travel market condition during FY09 was down. Airlines had the full impact of the economic slowdown. ?We had a huge cash-burn due to poor load factors with indications of further fall in air travel,? said an official from a private carrier who further added that foreign carriers have also been looking at investment in Indian carriers to grab a share in the market.

A member of the Federation of Indian Airlines (FIA), an apex body to look into aviation related issues said, ?We want the government to allow us handle our own ground handling. Currently, a third party does it for each of the airline, which makes it an expensive affair for us. The existing policy, which says airlines cannot do their own ground handling, should be revoked.?

Another major concern with most airlines is the fringe benefit tax (FBT). For airlines, even routine aspects like travel and accommodation for flying crew as well as passengers whose flights are delayed come under the FBT purview. A service tax is also levied on upper-class air travel as well as landing and air navigations fess, which the industry wants abolished.

Wish list

•Rationalise taxes on aviation turbine fuel by bringing it under the ?declared goods? category so that it attracts a uniform tax of 4% pan India

•Trim down airport charges, which currently are 70-80% higher than the international standard

•Formation of policies to allow foreign direct investment in the sector

•Existing policy, which says airlines cannot do their own ground handling, should be revoked