Govt readying Rs 5,000 cr relief package for airlines

New Delhi: Get ready to fly out of the air pocket. The government is drawing up a whopping bailout package - to the tune of Rs 4,500 crore to Rs 5,000 crore - for all domestic carriers. Coming close on the heels of steepest ever cut in aviation turbine fuel (ATF) prices by over 16%, the relief package is expected to come as a big shot in the arm for the struggling aviation industry.
According to top government sources, the bailout package is expected to give a relief of Rs 4,500-5,000 crore to all domestic carriers in the coming months.
Once these measures are rolledout , it is likely to turn into celebration time for consumers too, since many leading domestic airlines , including national carrier Indian, would be forced to re-work their fares.
According to sources, the salient features of this package would be to cut airport charges for a limited period by 50%. It is estimated that all airlines together deposit Rs 2,500-3 ,000 cr annually as airport charges, and this step will come as a huge relief for the ailing carriers. The through-put charges which the airport operator charges from the oil companies would also be reduced drastically. In the last one year, these charges have shot up to Rs 1,000 per kilolitre (ATF) from Rs 60 per kilolitre. Besides, the 8% excise duty on ATF would be removed and all oil companies would be asked to rationalise the base price and bring it at par with the international ATF prices.
14/09/08 Raja Awasthi/Economic Times

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Categories: Indian Aviation- In General Sep 2008