The government of Andhra Pradesh is planning to launch an airline. This airline is most likely to be named after Amaravati, once the capital of the state is developed. Chief Minister, N Chandrababu Naidu said that this is an initiative aiming at bringing in global exposure to the upcoming capital city and also to boost the aviation sector in the state.
He also said that when Amaravati is fully developed, the government will wish to have its own international airport and airline, depending upon the requirement at that particular time. The state currently has five commercial airports – Visakhapatnam, Tirupati, Vijayawada, Rajamundry and Kadapa. Adding on are the six Greenfield airports – Bhogapuram, Dagadarthi, Orvakallu, Kuppam, Tadepallegudam and Ongole, which are also being developed through public private partnership (PPP).
Even though the VAT on jet fuel has been reduced to 1 percent by the government, the losses being incurred on this account have been offset by the surge in air traffic. Before the AP Aviation Policy 2015, there was 4 percent VAT on aviation turbine fuel. Later on it has been reduced to 1 percent. The multiplication in the number of flights after the VAT reduction has led to the revenue loss of the state.
The air passenger traffic in the state is expected to grow to 3.6 million by the end of this fiscal year, with the previous year having only 2.7 million passengers. However, the aircraft movement in all the airports is most likely to expect a growth to 44,437 by the end of this fiscal year.