Airlines wait for panel to trim taxes before taking a call on fares

New Delhi/Mumbai: Despite a drop in jet fuel prices by nearly 30% in the past two months, airlines are unwilling to pass on the benefit to passengers immediately, waiting instead for the decision of a committee appointed by Prime Minister Manmohan Singh on further reduction of taxes on jet fuel, also referred to as aviation turbine fuel or ATF.
The committee, tasked with looking in to the grievances of the loss-making airline industry, is scheduled to meet in New Delhi on Tuesday. One of the options before the panel headed by cabinet secretary K.M Chandrasekhar includes reducing state-level sales tax on ATF to a uniform 4% from as much as 30% in some states now.
After four price revisions in two months, ATF today costs airlines Rs39,380.51 a kilolitre in Delhi, nearly equal to price levels in August last year. The revisions were also a result of a customs duty waiver offered by the government earlier this month.
“We are still evaluating, but no decision has been reached as yet,” said Kingfisher Airlines Ltd executive vice-president Hitesh Patel on whether there were any possibilities of the carrier reducing airfares. Executives from Jet Airways (India) Ltd and National Aviation Co. of India Ltd, or Nacil, that runs Air India, echoed the sentiment.
17/11/08 Tarun Shukla and P.R. Sanjai /Livemint

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Categories: Indian Aviation- In General Nov 2008