The aviation industry is the worst hit globally because of COVID-19, with an estimated loss of USD 500 billion in revenues this year. Actions taken by governments reflect both the concern and importance the sector holds in the economic landscape. While the stark differences in financial bailouts and support lines across countries, discernibly skewed towards flag carriers, run the risk of causing permanent distortions in the marketplace, the inevitability of these measures is undebatable given the colossal economic fallout of losses across the value chain.
In May, the Finance Minister announced some important policy initiatives to address pending demands of the Indian aviation industry, but these fell short of providing sustainable financial support to struggling carriers or a clear trajectory for reform of the sector to unshackle growth deterrents.
The core issue dominating discussions for many years has been the high-cost structure of the industry. A theme that has never been more relevant than now as businesses are fighting hard to conserve cash and remain alive in a fiercely competitive and risk prone industry. Reduction in GST rates for MRO businesses has provided timely relief but rationalization of customs duties and taxes on ATF remain unaddressed. It is also important to focus on structural reform to wrest competitive advantage where possible.
India’s GPS Aided GEO Augmented Navigation (GAGAN) program, believed to be the world’s most advanced air navigation system, offers the possibility of a quantum shift in service levels, costs of operations and delivering benefits to aviation and other stakeholders. The project implemented in collaboration with the Airports Authority of India was intended to make flying safer, faster and cheaper. Sadly, this pioneering, state-of-the-art technology built by ISRO remains largely unutilized five years after it was commissioned and certified for commercial use.
GAGAN was developed and commissioned at a cost of around $115 million. It is also interoperable with other satellite–based systems such as WAAS (US), EGNOS (Europe) and MSAS (Japan) giving it the ability to provide seamless services across global airspaces. Its coverage extends from West Africa to Eastern Australia, which makes interested users within this hemisphere beneficiaries of the system. Most importantly, while it is primarily developed for air navigation purposes, it can extend significant benefits to many other sectors like defence, surface transport, agriculture, mining, telecom or disaster management across geographies.