Paramount to spread wings

Bangalore: It’s a question that has baffled everyone in the aviation industry. How did smaller jets (of weight less than 40,000 kilograms) get a special mention in this year’s Budget when the government has left the aviation sector more or less untouched?
Paramount Airways managing director M Thiagarajan is quick to explain why this happened.
“There was an anomaly in the previous policy. The turboprop - ATR - had a distinct advantage over superior jets (with weight less than 40,000 kg) like Embraer and Bombardier in the form of lower taxes. It was like we were being penalised for using better technology.
We had made a representation to the finance minister to rectify this and bring all small aircraft under the same tax regime,” says Thiagarajan.
The FM’s new announcement will result in a 30% savings on fuel costs for the airline with the huge tax cut on jet fuel from 26-30% to 3%. In monetary terms, this would translate into an annual saving of Rs 100 crore, which would surely shore up its bottomline.
Besides, since the new tax regime will bring down the operational cost, it will help the Coimbatore-based carrier, which is predominantly present in southern cities, to ply on long haul routes connecting north-eastern cities like Cochin-Imphal and Coimbatore-Chandigarh.
08/03/07 Praveena Sharma/Daily News & Analysis

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Categories: Paramount Airways Mar 2007