Three established international carriers have announced their interest to enter the domestic Indian civil aviation space since the government decided, in September 2012, to further open up the skies. Fresh competition and a gradual shift towards rationalization of aviation turbine fuel by different state governments will mean more competition, more seats, and hence cheaper air tickets for Indian flyers in the near future.
The proposed move reaffirms the potential offered by the civil aviation market. These three deals, which are in different stages of approval, could be the game-changer in a market which is staring at cumulative losses of $450 million in the July-September quarter.
Currently, Indian skies are not lucrative for aviation business because of the high cost of jet fuel, bureaucratic and political hindrances and a huge component of tax. Consider this. Indian carriers pay nearly `75,000 per kilolitre for ATF wherease it is sold at `45,000 a kilolitre in Singapore.
Still, the sheer numbers of Indians looking to fly make the sector lucrative for players who have the risk appetite. From a paltry 50.98 million in 2005-06, India’s passenger count is expected to go up to 321.28 million in 2016-17 (end of the 12th Plan).
Read News In full 22/09/13 Sharan Poovanna/New Indian Express
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