Be that as it may, it cannot be denied that GoAir continues to bleed with heavy losses, as is true for every aircraft carrier in the country. The reason, according to Jeh, is the triumvirate of three –
infrastructure, policies & taxes, all of which need to be bettered for the next big leap forward in Indian aviation. “Taxes are the first concern. If the barrel is costing about $73, then we pay 27% more than that as sales tax. I mean it is ridiculous & not heard of anywhere else in the world. Why don’t we incorporate corporate income tax? If this gets done, then I would get profitable overnight.” He laments how 60% of the airline income goes to the government & petroleum company, which the company can’t control. And the figure for that internationally is 27%. That’s one major reason for the failure to make profits yet, according to Jeh. In fact, raising a question on the aggressive expansion plans of his many competitors, Jeh is of the view that the more planes you have; the more losses one makes. In fact, he says that given the prevailing conditions in the aviation sector, GoAir has revised its earlier estimates of fleet expansion, & restricted them to 35 planes by 2011 (instead of 50 aircraft s).
infrastructure, policies & taxes, all of which need to be bettered for the next big leap forward in Indian aviation. “Taxes are the first concern. If the barrel is costing about $73, then we pay 27% more than that as sales tax. I mean it is ridiculous & not heard of anywhere else in the world. Why don’t we incorporate corporate income tax? If this gets done, then I would get profitable overnight.” He laments how 60% of the airline income goes to the government & petroleum company, which the company can’t control. And the figure for that internationally is 27%. That’s one major reason for the failure to make profits yet, according to Jeh. In fact, raising a question on the aggressive expansion plans of his many competitors, Jeh is of the view that the more planes you have; the more losses one makes. In fact, he says that given the prevailing conditions in the aviation sector, GoAir has revised its earlier estimates of fleet expansion, & restricted them to 35 planes by 2011 (instead of 50 aircraft s).For Complete IIPM Article, Click on IIPM Article
Source: IIPM Editorial, 2006
An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative
Source: IIPM Editorial, 2006
An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative
