Airlines cry over huge losses

New Delhi: Despite mounting pressure from the various corners of the government, major airlines of the country Jet, Kingfisher and Air India
expressed their inabilities to reduce fares, citing huge losses. On Tuesday, FM P Chidambaram asked airlines to lower fares and help stimulate consumer spending in the slowing down economy. Though low-cost carriers (LCCs) responded favourably, the full service trio pointed out massive accumulated losses as a roadblock to lower tariffs in a hurry.
However, people's anger over airlines' refusal to reduce fares, despite steep reduction in jet fuel prices, has made the government worried. On Tuesday, a Prime Minister-appointed panel asked the aviation ministry in a meeting, to take up issues of cutting fares, improving connectivity and increasing the number of passengers in skies with the carriers.
The aviation ministry also made a case for getting a declared good status for ATF (aviation turbine or jet fuel) so that a uniform 4% sales tax is levied on it throughout the country. Currently states levy 30% sales tax that made ATF expensive in high crude price days, while the aviation industry is fearing a loss of $2 billion in the current financial year.
Full service airlines Air India, Jet and Kingfisher lost anywhere up to Rs 11 crore daily in the five months from April to August when fuel prices were very high. They have piled up huge dues with various agencies like oil companies, airport operators and other suppliers.
19/11/08 Saurabh Sinha/Times of India

To Read the News in full at Source, Click the Headline

Categories: Indian Aviation- In General Nov 2008