From being the fastest growing aviation market in the world, India is now the "worst performing"  domestic air traffic country globally. The International Air Transport Association (IATA) has termed the 12.4% plunge in domestic air travel recorded here in October 2012 over same month a year ago — highest fall anywhere — as a reflection of "the weakening economy and struggles" within the domestic airline industry.

"Weakness in India, Japan and the US, stands in stark contrast to the strong growth experienced in China and Brazil ," IATA's report on global traffic results for October says. 

Senior officials of Indian carriers warned that unless the government does something fast on rationalizing jet fuel prices and lowering landing and parking-charges and steep airport user fees on passengers, especially in Delhi, the cost of flying would get prohibitively high and kill the fabled Indian aviation story. Domestic air travel in November 2012 has fallen by 15.7% over same month last year, IATA said. 

"Operating cost for an airline is among the highest in India globally. High price of jet fuel — caused by a high base price set by oil PSUs and then the 20%- 40% sales tax levied by states on that high base and steep private airport user charges in Delhi are the biggest threat to airlines' survival.

Forget the mismanaged Kingfisher or Air India, even the well-run airlines are finding it hard to survive. Despite this scary situation, the government is simply refusing to act on the cost front," said a senior airline official. Official of another airline said such a costhostile environment, allowing FDI by foreign carriers won't help much. In this backdrop, BRIC partners are leaving India far behind in the field of aviation . IATA says Brazil experienced the strongest growth — 9.8% — in domestic air travel in October.

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