SpiceJet expects stimulus package for aviation sector

Ajay Singh, Director, SpiceJet, expects a stimulus package for the aviation sector. “We are hoping for a reduction of duties and taxes on the aviation turbine fuel. Other small things like the fringe benefit tax being applicable to pilots when they stay in hotels, the cost of landing charges and parking charges are basic irritants that are increasing the cost of aviation."
The government, he feels, needs to ensure that there is a policy where the roadmap for the next four or five years is clearly defined. “Now parts of this policy that need to be urgently notified are the foreign direct investment (FDI) cap. The development of infrastructure is absolutely key. There has to be a fund to develop small airports. There has to be greater privatisation of airports, there needs to be an airport regulator put in place to ensure that what the airlines and customers are being charged is fairly computed. There needs to be a policy on use of airspace and the allocation of airspace between a civilian and the defence sector.”
Here is a verbatim transcript of the exclusive interview with Ajay Singh on CNBC-TV18.
What are your expectations from the government?

A: We expect that there will be a stimulus package for the aviation sector. Aviation has grown very rapidly in the last few years. But at this time to ensure that it keeps growing, we need to bring down the cost of aviation and there are several things that the industry has been asking for. We hope that the government can take quick action. For example on the reduction of duties and taxes on the aviation turbine fuel there has been a long standing demand to have it declared as ‘declared goods’. Once that is done we can significantly bring down the cost of aviation.
There are other small things like the fringe benefit tax being applicable to pilots when they stay in hotels, the cost of landing charges and parking charges. So, these are basic irritants that are increasing the cost of aviation. As you know the aviation sector is very price sensitive. The moment you stimulate it with price, the moment you can bring the cost down, you see a very rapid increase in the sector as has happened in the last few years. So, we hope that the government can take quick action.
28/05/09 CNBC-TV18/Moneycontrol.com

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Categories: SpiceJet May 2009