Kingfisher-Deccan may get to carry forward losses

New Delhi: The merger of Vijay Mallya’s Kingfisher Airlines with low-cost leader Air Deccan may turn out to be much sweeter than anticipated as the government is likely to allow them to carry forward accumulated losses and set it off against future profits of the merged entity. As the combined loss of the two airlines is estimated at Rs 2,000 crore, the move may come as a major boost to the merged entity.
The facility to carry forward losses after merger was provided to Air India through a specific decision and the break is not available to domestic airlines now. The move could also help Jet Airways in case it decides to merge Air Sahara (now rebranded as JetLite) with itself.
The civil aviation ministry has urged the finance ministry to provide the carry-forward facility to all airlines by amending Section 72A of the Finance Act. After the Air India-Indian merger, the government allowed the merged entity to carry forward losses and unabsorbed depreciation through a specific decision applicable only to the state-owned carriers.
Sources said civil aviation minister Praful Patel may meet finance minister P Chidambaram in the new year to push for liberalisation of the tax regime for Indian carriers so that the industry can improve its financial health.
01/01/08 Nirbhay Kumar/Economic Times

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Categories: Kingfisher Jan 2008, Simplifly Deccan Jan 2008