Fuel tax rejig, infra required to spur air traffic growth


Fuel tax rejig, infra required to spur air traffic growth

The downtrend in air passenger traffic might continue unless the new government takes steps to reduce air fares via rationalisation of jet fuel taxes and infrastructure creation to spur capacity at major airports.

Industry experts warn that unless these crucial steps are implemented, the sector would continue to see a slide in passenger traffic numbers. Lately, high fares caused by capacity constraint and slowdown in economic activity has subdued passenger traffic. The growth rate of the high frequency indicator is usually 1.3-1.4 times the gross domestic product (GDP) growth of the country.

“Besides, economic revival and pick-up in tourism demand, the government needs to address India’s aviation infrastructure requirements and other matters (like tax on ATF), which have constrained the performance of airlines,” Kinjal Shah, Vice President and Co-Head, Corporate Sector Ratings, ICRA, told IANS. Read More

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