Taxation imbalances in aviation sector need to be corrected: SpiceJet chief

Ajay Singh

Asserting that Indian aviation sector has terrific potential, SpiceJet chief Ajay Singh has said imbalances in regulatory and taxation structure need to be corrected for the sector, which can be a bright spot of the economy.

Singh, who has helmed the turnaround of the once ailing low cost carrier, said big bold reforms and more out of the box thinking can be expected from the government.

"If there was any government which has will and political strength, then it is this government. Aviation can be one of the bright spots of the economy ... Some wonderful work has been done, if you see UDAN scheme and other initiatives," Singh told PTI in a recent interview on the sidelines of an IATA event here.

Ude Desh ka Aam Nagrik (UDAN) or regional air connectivity scheme was launched in the first term of Prime Minister Narendra Modi-led government as part of efforts to make flying more affordable as well as connect unserved and under-served airports. Various other initiatives were also taken up during the first term to bolster the aviation sector.

After being one of the fastest growing domestic aviation markets in the world, passenger traffic growth turned negative in April, mainly due to crisis at Jet Airways. The full service carrier shuttered operations in April.

"In aviation, we need to get our cost structure right, ATF under the GST, build India into a global aviation hub. Aviation can be a great employer of people and has terrific potential. We need to think big.

"We have the opportunity to be the service centre of the world for aviation. We need to correct the imbalances that exist in our regulatory and taxation structure," Singh said.

The airline industry has been pitching for bringing Aviation Turbine Fuel (ATF) under the Goods and Services Tax (GST). Jet fuel accounts for more than 40 per cent of an airline's operational cost.

Earlier this month, global airlines' grouping IATA's chief Alexandre de Juniac said developing markets are expected to provide the majority of additional passenger demand.

"India and China alone are forecast to account for around 45 per cent of all additional passenger trips over the next two decades. Even more than today, the travellers of the future will come from all walks of life and economic means," he had said.

According to Singh, it is wonderful that the country has a strong and stable government for the next five years.

"I believe that the government will focus hard on promoting economic growth and employment. You will see big bold reforms and much more out of the box thinking at much higher pace. I think this government has the political strength and the political will to do it," the SpiceJet Chairman and Managing Director said.

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