Airlines asked to report on impact of aviation fuel duty cut on fares

New Delhi: The Ministry of Civil Aviation has asked domestic airlines to report back in the next few days on whether lowering the prices of aviation turbine fuel (ATF) will lead to any benefits for the passengers and what quantum of losses being reported are on account of increase in fuel prices.
“Before the Ministry can make a plea for lowering taxes levied on ATF, we need to know whether any reduction will lead to airlines lowering fares or holding them at the current levels,” a senior Ministry official said after a meeting the Chief Executive Officers of various airlines had with Secretary Civil Aviation, Mr Ashok Chawla.
The meeting was held to prepare the grounds for a proposed meeting between Prime Minister, Dr Manmohan Singh, and the Minister for Civil Aviation, Mr Praful Patel, on steps that need to be taken to ensure that growth of the industry is not hampered.
At the moment industry is reeling under heavy losses, which could cross Rs 4,000 crore during 2007-08 and double to Rs 8,000 crore in the following years, Mr Chawla said.
“Oil prices are at all-time high and airline operators are finding it difficult to make both ends meet.
“In fact there are substantial losses being reported by the airlines,” the Secretary added.
The industry also indicated that it may have to reduce capacity i.e., the number of flights operated to offset the increase in costs and lower passenger carriage.
04/06/08 Business Line

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Categories: Indian Aviation- In General Jun 2008