Airlines may take time to decide on fare cuts

New Delhi: Airlines may take another few days to decide on slashing air fares even though the jet fuel prices have been cut today — the sixth reduction since August this year.
Industry sources said a decision is likely only next week. According to industry estimates, the fares are likely to be lower by 10-12 per cent.
Sources said national carrier Air India could take the lead in announcing lower fares as it has already started working on it. State-run oil companies today cut Aviation Turbine Fuel prices by Rs 2,480 per kilolitre, effective from December 1. Civil Aviation Minister Praful Patel had appealed to airlines to cut fares and reciprocate the measures taken by the government to help the ailing industry.
Besides reducing ATF prices, government has abolished five per cent customs duty on jet fuel. It is also planning to amend the Central Sales Tax Act in the coming session of Parliament to include ATF in the list of declared goods so that only a flat four per cent tax is imposed on it across the country.
When contacted, an Air India official said the company is working on the impact of the price cut on the overall cost of operations. But it would take a few more days to take a decision.
30/11/08 Press Trust of India/Business Standard

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Categories: Indian Aviation- In General Nov 2008