Indian carriers are battling with a debt of around Rs 50,000 crore, hence the government should look at easing investment norms for the sector in the upcoming Union Budget 2012-13 on March 16, say industry bodies and experts with whom moneycontrol.com talked to.
Airlines are also hopeful of being allowed to directly import aviation turbine fuel (ATF) so that they don't have to pay huge sales tax which varies from 4% to 33% across states. Due to the high tax regime, Indian airlines pay nearly 70% more then what carriers in West Asia pay toward buying the commodity.
The sector is also looking forward for its airports to get a 'core infrastructure' status which will bring down airport development costs.
Have a look at the pre-budget wishlist of aviation industry representatives
Federation of Indian Airlines FIA
"We have been demanding FDI into the sector for the past three years, but now it is very crucial for the government to encourage foreign investment into the sector as banks and even investors are shying away from the sector," says a member of FIA. By FDI sanction, airlines are hopeful that foreign carriers might come forward to infuse the much needed equity in them.
Angel Broking
Sharan Lilaney feels the sector has hit a rough patch, with airlines like Jet Airways , Kingfisher Airlines and Air India reeling under rising operational and interest costs and predatory pricing. These airlines are expected to exit FY12 in the red due to mounting costs. "Airlines are starved for cash and desperately need to raise equity to remain afloat. The industry is hopeful of getting FDI approved in the upcoming budget."
Confederation of Indian Industries (CII)
Ankur Bhatia, chairman, CII's aviation committee says he is hopeful of the government approving direct import of aviation turbine fuel (ATF) in this budget.
FICCI
Has demanded that domestic airports be given a 'core infrastructure' status which will make it eligible for concession on purchase of goods for airport development. "Due to the sector not been given this status, it pays higher sales tax resulting in increased cost of project which translates into higher passenger fees," it said in a note.