After Jet Airways crisis, crucial to revive aviation sector: Travel industry’s wishlist from Modi 2.0

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Updated: May 24, 2019 5:37 PM

The aviation industry which is still coming out of the after effects of Jet Airways grounding needs certain reforms. The same will also help the travel and tourism industry.

Narendra Modi has got a majority in 2019 elections.

The jet crisis has not only dragged down aviation sector but is also impacting the travel and tourism industry and hence the next priority for Narendra Modi govt could be to revive the aviation, say travel and tourism companies. Along with this, improvisation in GST slabs, working on infrastructure and taking forward the work done under schemes such as UDAN (Ude Desh ka Aam Nagrik), Swadesh Darshan, PRASAD, among others, would help in strengthening the industry. Tourism and Travel is one of the crucial industries for the Indian economy as it accounts for 9.2% GDP of India.

Travel and tourism is also one of the major job providers and has provided jobs to 4 crore people in 2018, according to a recent FICCI-YES bank report. It becomes pertinent that the newly formed government takes a look at what all can be done to make the industry more prominent and viable.

Resolving the aftermath of Jet Crisis

The aviation industry, which is still coming out of the after effects of Jet Airways grounding, needs certain reforms. “Given the recent challenges faced by the aviation sector due to the withdrawal of Jet Airways flights and other challenges faced by Indian carriers, we believe there is an urgent need for a holistic view and corrective measures to be taken to revive the sector” Mahesh Iyer said adding that this will be pivotal to other industries as well including travel, tourism, hospitality and business environment.

Since the aviation and tourism industry are connected, one affects the other. The high ATF prices for carriers have caused dramatic losses to major carriers. “With the new government, the need to lowering ATF pricing and strengthening infrastructure at tourism sites is of key importance. This will encourage travel and affordability,” said Vishal Suri, Managing Director at SOTC Travel.

Building upon previous work

Narendra Modi government has worked upon enhancing the travel and tourism industry, however, “we see the opportunity for increased focus on initiatives like UDAN, HRIDAY and PRASAD,” Mahesh Iyer, ED and CEO, Thomas Cook (India) Ltd, told Financial Express Online. Furthermore, “increased allocation towards enhancement of the e-Visa initiative to include additional countries; development of new tourism circuits and attractions for the inbound traveller; and a strong focus on infrastructure – roads, railways, cruises, waterways and sanitation,” will help the industry, he added.

There has been significant work in the direction of e-visa rules improvements and “in 2018, 2.37 million foreign tourists availed the E-Visa facility which represents a 39.4% increase over 2017”, according to FICCI- Yes bank joint report on the Indian travel industry. However, the Indian rules are still not at par with neighbouring countries like Thailand, Sri Lanka and Indonesia which have attractive policies, said Deep Kalra, Founder & CEO, MakeMyTrip. “Our visa fee slabs, ranging from US$ 50 to US$ 80 makes India uncompetitive compared to its neighbours,” he added.

All about taxes and GST

Other than this, the industry could do with help in GST rates and other tax collections. “Rationalizing the GST rate for hotels and incentivizing the private sector will boost tourism,” Vishal Suri told FE online. Also, said Manish Iyer, clarification in the issue of Air Travel Agent being subject to Tax Collection at Source, is also needed.

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