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Indian airlines lose Rs 5,289 crore in FY25; Govt says sector driven by market forces

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The Union Government on Monday informed the Rajya Sabha that Indian airlines posted a combined net loss of Rs 5,289.73 crore in the financial year 2024-25, according to data submitted by scheduled operators.Responding to an unstarred question raised by Shiv Sena (UBT) MP Priyanka Chaturvedi, Minister of State for Civil Aviation Murlidhar Mohol presented the financial performance of airlines for the last three financial years and said the sector had recorded fluctuating losses during the period.According to the data placed before the House, Indian airlines incurred losses of Rs 18,606.78 crore in FY 2022-23, which narrowed significantly to Rs 924.39 crore in FY 2023-24 before widening again to Rs 5,289.73 crore in FY 2024-25.The minister said the government has taken note of financial pressures faced by the aviation sector but emphasised that the industry operates in a deregulated environment where airlines make their own financial and operational decisions.He told the House that the domestic aviation sector was deregulated after the repeal of the Air Corporations Act in March 1994. Since then, matters such as resource mobilisation, debt restructuring and business strategy have been handled by individual airlines based on commercial considerations.Mohol said airline profitability is influenced by several operational and market factors, including seat occupancy levels, fuel prices, aircraft capacity, seasonal demand fluctuations and other industry variables that directly affect ticket pricing.On the issue of aviation fuel pricing, the minister said the price of Aviation Turbine Fuel (ATF) has been market-determined since April 1, 2001. Public sector oil marketing companies determine ATF prices based on international product prices and prevailing market conditions.At present, ATF attracts a central excise duty of 11 per cent, while flights operating under UDAN or Regional Connectivity Scheme are charged a reduced excise duty of two per cent.The minister also said value added tax on ATF varies across states and Union territories as it falls within their taxation powers.Addressing concerns over financial monitoring of airlines, Mohol said the financial and operational health of scheduled carriers is tracked through existing regulatory and statutory frameworks.Airlines are required to comply with financial and operational provisions laid down under the Aircraft Rules 1937 as well as the Civil Aviation Requirements issued by the Directorate General of Civil Aviation (DGCA). They are also subject to financial disclosure norms and oversight under applicable corporate and regulatory laws.

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