BUDGET EXPECTATIONS: AVIATION SECTOR

16 Jan 2023 , 02:10 PM

ICRA foresees the Indian aviation industry expects financial aid and reduction in levies and taxes in the immediate near term to revitalise operations and improve its financial health, which include rationalisation of duties on ATF and reducing airport charges, parking and landing along with navigation charges among others. The sector will also expect extension of the ECLGS scheme or similar credit schemes to support the sector in terms of liquidity support given the adverse impact of the high ATF prices and depreciation of the INR against the USD.

The Union Budget 2023 is expected to re-focus on improving regional connectivity through RCS or UDAN initiative. The Budget is also likely to focus on setting up new airports and expanding the capacities at some key airports to help address the current airport infrastructure constraints faced by the airlines and to improve connectivity with the underserved/unserved airports to boost tourism.

The Government is expected to undertake further measures to boost tourism like developing more iconic tourist destinations and expanding the e-visa/visa on arrival scheme to additional countries.

In line with the Government’s increasing thrust on Atmanirbhar or Make in India initiative, the Budget could focus on incentivising the MRO sector through greater push towards MRO activities in the country and push for building requisite infrastructure for promoting aircraft leasing companies/business in domestic markets.