ATF is the major cost component in the airlines operations. The Government modernized the airports added new airports in the country. Moreover, direct import of ATF was not allowed until recently. The efforts of Indian Government was to transform the aviation industry into a more liberal and investment friendly industry.
But the aviation industry is also confronted with severe challenges posing threat to the survival of air carriers. Flight delays are a common and everyday scene but they leave huge impact on operators as well as the economy. Virtual communication facilities have negatively affected air passenger traffic especially in the international travels.
Technological advancements in the field of telecommunication have also replaced the need for air travel to a greater extent. This service tax on air tickets and on the services purchased by Indian airline operators further add to the operating costs.
Air travel in India is facing tough competition from railways.
The Government also offered improved FDI policies that have contributed significantly to the opportunities. The corporate sector is increasingly utilizing communication technology like video conferencing in order to save time and costs. Though many new entrants have joined the industry, a large numbers have also withdrawn themselves owing to heavy losses.
The railways were facing competition with the introduction of low cost air carriers therefore various steps were taken to improve the rail services in the country.
A delay in flights not only negatively affects the aviation industry but other industries as well because aviation largely connects people with their businesses.
Which in turn raises their standard of living. This tendency to lure passengers through attractive discounts and low fares has resulted in price wars in the industry.
And increase in air cargo movement. Commerce Ministry advises Finance Ministry. And many others are struggling hard to survive.
There is stiff competition in aviation industry which leaves the operators helpless. One of the major reasons is the high sales tax levied on ATF by respective state governments.
This is a vital industry which contributes significantly to the Gross Domestic Product GDP and provides employment to the masses. The aviation industry players frequently use third party services for ticketing, aircraft maintenance, ground handling and catering etc.
All these factors have resulted in better opportunities for the aviation industry. Many new trains with improved service quality have been introduced offering passengers a good substitute comparing to air travel. Air India and Kingfisher Airlines are good examples of this crisis. The delays result into money costs, time costs and cost of lost demand because it discourages many air passengers.
Greater inflow of tourists from all across the world. High operating costs along with highly price sensitive consumer profile compel Indian operators to reduce passenger fares in order to compete for market share.
The Government should also implement strong measures to reduce taxes and improve infrastructure. PTI September 9, There is a need to make joint efforts towards the growth of aviation industry rather than indulging in unhealthy competition and price wars.
Increase in disposable income of the consumers. Entry of low-cost carriers. Promotional writing, blog writing, branding copywriting and more.Challenges faced by the aviation industry By Ankita Agarwal on September 24, Aviation is an important parameter of a nation’s economic health.
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