Indian Aviation Sector has been hit hard in the recent times. A low economy growth rate, rising fuel prices high taxes and less FIIs have dampened the mood in this sector in 2012. Moreover, strikes at Air India and the already lost out Kingfisher have added to the misery.
The weather has been turbulent for Air India and Kingfisher. With Air India being declared as a loss making and inefficient PSU, it was hit by a strike lasting for 60 days. And Kingfisher was hit with several strikes spoiling the company’s great reputation in the field leading to suspension of it’s operating license.
Now comes the good part for the nest year, that it Domestic Carriers have been allowed to import jet fuel directly as end users and foreign carriers are being allowed to invest in domestic airlines. But this FDI might be lost due to high costs of the aviation operations.
Currently, there is a 2.9% Growth with 55 Mn passengers flying this year. Experts prescribe a sales tax cut on jet fuel, promotion and launch of tier II and III city airports. This will help the sector to build stronger airlines with no pay problem and faster infusion of FDI that has been allowed recently seeing Kingfisher’s condition.
