‘We want a tax holiday for the aviation sector’

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Charter aircraft companies are receiving requests to move essential commodities and conduct repatriation flights during the ongoing nationwide lockdown, but are unable to fulfil them due to lack of government permissions, said Sanjay Julka, chief executive officer, technical, Club One Air, one of India’s oldest and largest air charter companies. After a brief setback, India will emerge stronger once the pandemic is over, Julka said in an interview. Edited excerpts:

How has your sector been affected by the lockdown imposed to contain covid-19?

Aviation across the spectrum has been badly affected. Flights are permitted for some special emergency services such as repatriation, transportation of medical supplies, etc. Overall, revenue is down by almost 80% and, in some cases, to nil.

Are you looking for some relief measures from the government?

The government has taken some initiatives in providing relief. Operational relief has been provided by giving extensions and waivers to aircraft, as well as crew, so as not to ground the aircraft due to disruption in their training and maintenance schedules. This must continue for a while, for at least six months after covid-19 is over around the world. Other government relief measures include late payment of taxes or loan instalments, which are good and needs to continue further.

Should there be some stimulus package for your industry?

Our sector would need a special stimulus package in the form of low-interest loans, reduction of taxes, maybe a tax holiday for a few years. The government must not equate aviation, or for that matter, any industry which is also a means of communication, with other industries.

Do you think the country is staring at a recession? How hard will your industry be hit?

Although there will be loss of life, which is tragic for any country, I sincerely feel that India will emerge into a much better position than it was before covid-19. Look at the ingredients that are present—such as the comparatively very low infection rate, our acknowledgment by superpowers, China losing the trust of major economies, etc. I think if India plays the game well, there definitely will be a short period of recession, but this will be followed by double-digit growth. Our industry will also initially hit a recession, but Indian aviation is far away from realizing its potential and the sound leadership of the country should be able to exploit the silver lining in this pandemic. Sales growth for the short- and mid-term have been revised. Being temporary, our reserves coupled with the government’s relief package should be able to get us through.

How do you think consumer demand could be revived after the lockdown is lifted?

Had it been a war or a normal recession-like situation, we would have expected a drop in charter demands. The need for social distancing and personal hygiene is likely to continue for a while (even after the lockdown is lifted) and since business aviation is well-prepared and equipped to handle both requirements, I personally expect charter demands to rise.

Will you be looking at either salary or job cuts?

This will depend on the duration of the pandemic. Presently, we are hoping to survive it without salary or job cuts. I am confident that all salary or job cuts in the aviation sector, if any, would be temporary.

Are you looking for loan moratoriums beyond the three months suggested by the Reserve Bank of India? Should it be further relaxed?

Yes. Not only do we expect a loan moratorium, we also expect a complete tax holiday for the aviation sector. The government has already announced a lot of stimulus in the economy and have made provisions for money to come out in the market.