Airlines threaten fare hike in states with high levies

New Delhi: Airlines, which already levy a hefty fuel surcharge of Rs 1,650 on all tickets, are now threatening to hike levies for flights operating in states that charge higher tax rates on ATF (aviation turbine fuel).
"At a time when fuel surcharge is rising and hurting growth, some airlines are indeed considering imposing differential surcharge for different states. This structure will help lower fares for low tax states and increase fares for passengers embarking from high tax states," V Thulasidas, chairman of the Federation of Indian Airlines (FIA), said in a presentation at the first-ever national conference on civil aviation here on Friday. The sales tax rate in states varies in the range of 20% and 33%.
FIA is an industry body representing almost all Indian carriers, including Jet, Kingfisher, Air India and SpiceJet.
The indication came as aviation minister Praful Patel told representatives from all states to not look at "aviation as a milch cow" and that "all airlines are losing money because of high taxes". He specifically mentioned Delhi, Maharashtra, West Bengal, Tamil Nadu, Kerala, Andhra Pradesh and Goa for their very high sales tax rates.
19/01/08 Saurabh Sinha/Times of India

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Categories: Indian Aviation- In General Jan 2008