Airline industry to petition panel on fuel tax cut

New Delhi: The domestic airline industry is to petition the Empowered Committee of the State Finance Ministers for reducing and rationalising the sales tax being levied on aviation turbine fuel across the country.
This comes in the wake of global fuel prices hitting record high and yields on both domestic and international flights coming under severe pressure. This month alone, the average price of the fuel has touched Rs 56,000 per kilo litre, up from Rs 38,000 charged earlier. Airline industry officials point out that for some time now, the increase in global oil prices has been at a level that it has become difficult to absorb.
Air India, for example, expects its annual oil bill for 2007-08 to rise by around Rs 410 crore over the previous year. The airlines’ Chairman and Managing Director, Mr Raghu Menon, told Business Line that the total fuel bill of National Aviation Company of India Ltd (NACIL) during 2007-08 is expected to be around Rs 6,350 crore, up from Rs 5,940 crore in the previous year.
While the airline industry has been increasing the fuel surcharge, this has not really helped compensatethe overall increase in the fuel bills as most airlines have been passing around 40 per cent of the fuel hike to the passengers and absorbing the rest, airline officials said.
18/04/08 Ashwini Phadnis/Business Line

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Categories: Indian Aviation- In General Apr 2008