Airline industry that suffered heavy losses during the Covid pandemic is returning to pre-Covid levels, and has recorded a traffic of 3.8 lakh passengers per day, Civil Aviation Minister Jyotiraditya Scindia informed the Rajya Sabha on Monday.
Replying to supplementaries during Question hour, the minister said the civil aviation sector is on its way back to recovery and is roughly about 5-6 per cent off from pre-Covid levels.
“I am pleased to report to the house that pre-Covid our maximum number of passengers in India per day was about four lakh and we reached a level of 3.83 lakh per day in the month of December,” Scindia said.
“We are looking at resuscitation and with that we are hopeful that we will see a rebound in terms of employment levels,” he said.
For domestic sector, the minister said, the government has instituted airfare caps to ensure there is no predatory pricing.
He said controlling prices for international sector was beyond their power.
I am very confident that with the opening up of the international sector as announced from March 27, when the summer schedule of all airlines comes in, there will be enough supply of seats, both coming into India and going out of India.
Therefore, I think the pricing issue is something that the market will certainly take into account,” Scindia said.
The minister informed the house that high fuel rates too have contributed to heavy losses suffered by the airlines.
He said fuel contributes to about 37 per cent of the cost of running an airline, which suffered a loss of about Rs 19,000 crore last year because of COVID.
Fuel price has gone up close to 4.5 times, with 11 states charging VAT on aviation turbine fuel (ATF) ranging from 10 per cent to 30 per cent, he said.
“We pleaded with states to reduce tax on ATF. Before I took charge, we had 11 states that charged 1-5 per cent VAT on ATF and we had 25 states that charged between 15 and 30 per cent.
“We have now reversed that equation and 12 states have reduced VAT from 25-30 per cent to 1-4 per cent. There are 23 states now that charge VAT ranging 1-4 per cent, and only 11 states that charge it at 15-30 per cent,” the minister said.
On job losses, Scindia said the sector was affected very deeply world over, but bounced back with an equal amount of growth as soon as Covid waves subsided.
The minister said he sees civil aviation becoming the backbone of transportation across the country and achieving high levels of growth.
The CAGR for the aviation sector is close to about 10.6 per cent per year, he said, adding that the government has allowed the domestic sector to operate at their full capacity.
“We had brought back the sector to 100 per cent capacity on October 15 after the second wave,” said the minister.
By the time of summer schedule, international flights can also operate at 100 per cent capacity, he said, adding that it is for the free market to choose their routes.