HYDERABAD: The spiralling oil prices, high taxes on Aviation Turbine Fuel (ATF), rising interest rates and low fares are forcing Indian air carriers to post losses, according to a FICCI-KPMG concept paper. While passenger traffic registered robust growth, air travel is yet to penetrate to the level of masses, it said.Interestingly, another report released by CAPA-SITA estimates that the passenger traffic is likely to triple to 450 million by 2020, thus making India the world’s third largest aviation market. And, to cater to the growing traffic, major cities such as Bengaluru, Chennai, Delhi, Hyderabad and Kolkata will need second airports, while Mumbai, the financial capital, will need to a third airport.“In 2012, airport traffic will exceed 150 million passengers, of which 60 percent will be handled at private airports. By 2020, airport traffic is expected to reach 450 million passengers (360 million domestic and 90 million international), along with 6.5 million tonne of cargo,” said CAPA adding, “This would make India the third largest aviation market in the world. Over 90 million passengers are expected to pass through Delhi airport alone by 2020.”India is also expected to have a fleet of more than 1,000 scheduled aircraft and 2,000 general aviation aircraft.Meanwhile, the sector is also facing challenges such as airport tariffs, land acquisition and government approvals and will hence need an Essential Air Services Fund (EASF) to support air connectivity to tier II and III cities, besides investor-friendly policies. The FICCI-KPMG report also threw light on the need to reduce sales tax on ATF.“A good option before the government is to add ATF to the list of declared goods with a uniform levy of 4 percent across the country,” the report said.
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