New Delhi: Tough times lie ahead for the Indian aviation industry which is expected to bear a massive debt burden of USD 20 billion in 2011-12. The Planning Commission has recommended "significant and continuous investment" to give a boost to the cash-strapped sector.
   
In what may sound music to the ears of the industry, the plan body favoured rationalisation of taxes on jet fuel and investment by foreign airlines in Indian carriers.
   
A working group of the plan body, which formulated the 12th Plan for the sector, said by not allowing foreign carriers to pick up stake in Indian airlines, access to potential sources of capital and expertise was being denied.    

It proposed a projected total outlay for the sector at over Rs 54,743 crore for the entire plan period of 2012-17, including Rs 32,963.67 crore for Air India and Rs 17,500 crore for the Airports Authority of India.
    
Noting that half of the "huge debt burden" of USD 20 billion in 2011-12 was aircraft-related and the rest for working capital loans and payments to airport operators and fuel companies, the working group said the existing FDI policy "does not permit foreign airlines investment, thereby denying access to potential sources of capital and expertise".
    
It also pointed out that the industry faced "many taxes" like those on fuel, aircraft leases, airport charges, air passenger tickets, air navigation service charges, maintenance costs, fuel throughput fees and other such charges.
    
"These fees and taxes on inputs are either not present in other matured aviation markets, or are much lower there. The Indian air transportation industry is thus laden with very high costs and larger operating losses than their other counterparts globally," it said.

(Agencies)