The Indian aviation industry has witnessed rapid growth in recent years, mainly after the economic liberalisation of the country, which facilitated the entry of a host of private airline companies in the market. India’s recent economic prosperity has also made air travel a more affordable form of transportation for the growing middle and upper middle class segment of the population. However, the country’s aviation sector has been troubled by a lot of factors, all of which have led to lower profitability, making it tough to survive for many private airline operators. The current policy of taxation has made aviation transport fuel very expensive in India. Since fuel comprises a major part of an airline companies’ operating costs, this has, in turn, forced these companies to increase the price of air travel. Other significant problems which have hampered the growth of the industry include the lack of modernisation of the country’s airports and low availability of skilled personnel such as airline pilots in India. The aviation industry has immense potential to grow, given the low penetration levels at present and availability of more disposable income at the hands of people. Major policy reforms encouraging participation of foreign players and a more liberal taxation policy should largely help in the expansion of this sector. Hide this