Low yield, high operating cost among aviation sector challenges: Puri

Infrastructure constraint, the high operational cost of airlines, low yields due to competitive environment and currency exchange rate fluctuations are the four challenges that the aviation sector is facing currently, Civil Aviation Minister Hardeep Singh Puri said on Wednesday. In a written reply to the Rajya Sabha, Puri said: "The Indian civil aviation sector has shown consistent double-digit growth of passenger traffic more than four years in the past."

The Union minister was responding to a question about what are the constraints India faces in its road to become the third-largest aviation market in the world. The US, China and the UK are the current top three aviation markets in the world. "Challenges facing the aviation sector, inter alia, include infrastructure constraint, high operational costs of the airlines; low yields due to the competitive environment; currency exchange rate fluctuations adversely affecting profitability, etc," Puri said.

Yield is the average fare that is earned by the airline per passenger per kilometre. The Jet Airways shut down its operations on April 17 after running out of funds, leading to a sudden rise in domestic and international airfares.

The Mumbai bench of the National Company Law Tribunal admitted an insolvency petition filed by the SBI on behalf of the 26 lenders on June 20 for the debt-laden airline, which owes around Rs 25,000 crore to the lenders, vendors, lessors and employees.