Low-cost carrier AirAsia India has said the new tax regime will leave the aviation industry poorer by about INR 400 crore annually if the government does not roll back the levy. “On an average, an operator will have to pay an additional INR 10-12 crore per aircraft in additional levies, which include the five per cent duty on plane imports. This will put an additional INR 400-crore tax burden on the airlines that lease out planes,” said Amar Abrol, managing director and chief executive, AirAsia India. However he added that the airline has decided not to pass on this additional burden to customers as it expects the government to roll back the duty.
“The problem is that credit set-off of three per cent is available only on services and not on purchase of machinery or aircraft imports. Overall, it seems to be a negative impact and the details are being worked out. However, the one per cent reduction in taxes on economy ticket to five per cent in GST is good for the industry,” he said.
“As of now there is five per cent levy on aircraft imports. The industry is discussing with the aviation and finance ministries for exempting this. We will also have to pay three per cent GST on lease rentals but that is is available for credit set-off,” Abrol said. The three-year-old airline closed last fiscal with a revenue of INR 1,000 crore and Abrol said he hopes to cross that number by December this year as the company will be deploying four more planes by then.
“We are getting our 11th plane this week, which will be deployed from August 1. By Diwali, we will have three more. This should help us increase frequencies,” he said, adding the airline hopes to have 20 planes by 2018 Diwali. Meanwhile, the airline has announced adding Bhubaneshwar to its list of destinations and also adding six new routes connecting New Delhi, Jaipur and Bagdogra to Kolkata.
The airline, which began operations in June 2014, had reported a net loss of INR 7.8 crore in the March 2017 quarter, down from INR 26 crore in the December and INR 65 crore in the September quarter.
