Airlines refuel in Andhra, Kerala to save tax

New Delhi: A reduction in sales tax on aviation turbine fuel (ATF) by the Kerala and Andhra Pradesh governments is encouraging several air carriers to refuel from airports located in the states.
Several carriers like Air India, Spice Jet, GoAir and IndiGo are now planning to refuel their aircraft at the Hyderabad and Kochi airports to get a benefit on lower ATF prices. Carriers say that they were expecting Karnataka and Tamil Nadu to follow suit — which could encourage carriers to make south India their fuelling hubs.
While Hyderabad airport will start levying the decreased surcharge from the first day of its operations (March 16), the reduced charges will be applicable to all airports at Kerala from April 1.
Spice Jet is planning to add 6 additional flights to Hyderabad to its already operating 13, and increase Kochi flights up to 2 from the current one weekly flight.
ATF currently accounts for more than 47 per cent of an airline’s operating costs.
According to the airlines, the decrease in ATF rates would be very helpful for short-haul routes rather than long-haul ones. Also, fuel tankering or adding extra fuel does not work for all routes since the aircraft cannot be made fuel-heavy.
12/03/08 Anirban Chowdhury/Business Standard

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Categories: Airports Mar 2008, Indian Aviation- In General Mar 2008