India's Civil Aviation Minister: 'The industry is presently going through a severe economic crisis'

India's Minister of Civil Aviation Ajit Singh, addressing the members of Consultative Committee for the Ministry of Civil Aviation, noted (02-Dec-2013) the current financial challenges in the civil aviation sector in India, noting: "Even though the sector has grown significantly in the last decade, the industry is presently going through a severe economic crisis". He continued, "The Airline industry combined reported estimated losses of Rs.9771 crores and a debt of Rs.85,865 crores in the FY 2012-13. The spiralling cost of ATF, economic slow-down, devaluation of rupee, low yield, high operational costs and the consequent widening gap between revenue and expenditure contributed to this financial crisis. The flawed perception that flying is the rich men preserve has resulted in the civil aviation sector bearing the burden of high tax regime". He added, "The Central Government has taken many initiatives to lessen the stress in the sector and revive it. These include opening up of FDI by airlines up to 49%, permission to import ATF directly by the airlines, approval of TAP/FRP of Air India and a more liberalized policy regime. A decision to permit foreign carriers to invest in the airline industry in India (upto 49%) has already resulted in 3 major investment proposals getting fructified. These investments along with the adoption of international best practices in Management and technology in the airline industry are expected to lay the foundations of a sound turnaround of the aviation industry in India". [more - original PR]