Domestic airlines may curtail services

Mumbai: The domestic airline industry said it would be forced to curtail its services if it did not get adequate relief from the Government on the taxes levied on aviation turbine fuel (ATF).
Emerging from a Federation of Indian Airlines’ (FIA) meeting here late on Friday, Mr Vijay Mallya, Chairman of the Federation, said: “If the Government, for whatever reason, is unable to provide adequate relief, then we will have no option but to review our flight schedules; and connectivity will suffer.”
Sources in the airline industry indicated that FIA would wait till the end of the month to take a call on which flights to curtail.
“The chances are most airlines will look to curtail loss-making flights. The players will have to see that they do not violate the route dispersal guidelines of the Government by withdrawing these flights,” said a senior airline executive who attended the meeting.
A proposal for direct import of fuel by the airlines, rather than fuel purchase from domestic oil companies, was also mooted at the meeting. Import of ATF would save airlines the hefty sales tax levied by state governments, which vary from 4 per cent to 30 per cent.
The FIA Chairman, however, agreed that there were logistical issues to importing ATF, such as adequate storage facilities, which would have to be looked into.
15/06/08 Business Line

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Categories: Indian Aviation- In General Jun 2008