Indian airlines, airports saw financial losses worth Rs 22,400 cr in FY 2020-21

By: |
August 05, 2021 5:40 PM

The airlines have undertaken several measures to rationalise their cost structure, he said, adding that the pandemic has resulted in job losses in the aviation sector across the world, including in India.

To another query, Singh said that ATF or jet fuel is a major cost component of the operating expenses of an airline and that reduction in ATF price will help the airline industry. To another query, Singh said that ATF or jet fuel is a major cost component of the operating expenses of an airline and that reduction in ATF price will help the airline industry.

Indian airlines and airports incurred financial losses worth Rs 22,400 crore in the last financial year amid the coronavirus pandemic, according to official data.

Besides, 75 per cent of Airports Authority of India-operated airports are incurring losses. Also, AAI’s revenue came down to Rs 889 crore during April-June this year.

The data was provided by Minister of State for Civil Aviation V K Singh to the Lok Sabha through various written replies on Thursday.

He said the pandemic has severely impacted the civil aviation sector globally and that the country’s aviation sector, including airlines, airports and related services, has also come under financial stress.

“The financial loss of Indian carriers during FY 2020-21 is approximately Rs 19,000 crore. The financial loss of Indian airports during FY 2020-21 is approximately Rs 3,400 crore,” Singh said.

According to the minister, AAI has reported a reduction in its revenue from Rs 2,976.17 crore during April-June 2019 to approximately Rs 889 crore during April-June 2021.

The minister said that domestic air passenger throughout declined by 0.3 per cent in 2019-20 and by 61.7 per cent in 2021 due to the pandemic.

Domestic air passenger throughput refers to total footfalls at airports from domestic flights.

“Given the low traffic base in 2021-22, the domestic air passenger market is expected to double over the next few years as the impact of COVID-19 ebbs.

“The subsequent waves of COVID-19 (should they happen) could have lesser adverse impact than in the past as the number of fully-vaccinated people grows, traffic curbs are relaxed and the general demand for travel increases,” Singh said in a written reply.

To another query, Singh said that ATF or jet fuel is a major cost component of the operating expenses of an airline and that reduction in ATF price will help the airline industry.

“A proposal was sent to Ministry of Finance inter alia seeking exemption of GST on air cargo services for essential commodities, reduction of excise duty on ATF, credit support to airlines by oil marketing companies, interest subvention and financial assistance to Air India,” he said.

In a separate written reply, Civil Aviation Minister Jyotiraditya Scindia cited information received from airlines in India and said that no person employed by them “in the pilot category has had his/her services discontinued due to the COVID-19 pandemic”.

The airlines have undertaken several measures to rationalise their cost structure, he said, adding that the pandemic has resulted in job losses in the aviation sector across the world, including in India.

Scindia also said the government has taken various steps to help the civil aviation sector overcome the crisis due to the pandemic. The steps include reduction in GST rate to 5 per cent from 18 per cent on domestic Maintenance, Repair and Overhaul (MRO) services, according to another written reply.

The estimated number of directly employed personnel in the aviation and aeronautical sector was more than two lakh as on March 31, 2021.

Aviation regulator DGCA has suspended operations of scheduled international commercial passenger flights to and from India till August 31 but overseas services under Vande Bharat Mission and Air Bubbles are operational.

“As on 30.7.2021, there is a drop of 80-85 per cent in the total number of flights operating to/ from India as compared to pre-COVID levels,” Singh said in a written reply.

He also said that presently, Canada and Bangladesh have temporarily suspended flights from India under the Air Bubble arrangement.

Currently, India has Air Bubble arrangements with 28 countries, including Japan, the UK, the USA and the UAE.

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