While every other stakeholder related to the industry is making money (albeit in a seesawing pattern), the airlines are—without exception—incurring recurring losses.

Despite the recession that grips Indian aviation, it is a sunrise industry—its shine admittedly somewhat marred by clouds of gloom. That the industry will continue to grow is beyond doubt; the growth pattern of the nation absolutely mandates a corresponding progression in aviation activities. The course the history of individual airlines may meander through is still an area between black and white. There may be scope for another flurry of consolidation activity. On the other hand, the current survivors may—by some fortunate turn of events—find Providence giving them life sustenance through this difficult period.

Afterwards, market forces may permit all the current players to exist more or less as they do today—with opportunity for more players to enter the fray. It is always easier to write history than predict its events. But if Indian aviation is to survive the current, difficult phase of its history without any more bloodshed, some obvious actions need to be taken at once. The first, of course, must be the cost of aviation fuel to the airlines. While the lowering of crude prices to around $100 is a cause for cheer, the government needs to seriously consider itself as a stakeholder in the national aviation industry and take some painful steps to redress the situation.

Aviation fuel needs to be brought into the declared goods category and sales tax reduced to a less painful level of 4 per cent for airlines. Indeed, the whole price make up of aviation fuel needs to be looked at with specific attention to rationalizing excise duty. The airlines’ demand for being permitted direct import of aviation fuel from vendors abroad needs to be considered favourably. The ultimate objective of fuel price reduction initiatives should be to bring aviation fuel prices in India in line with those prevailing internationally.