CII panel on aviation to clear haze over airlines’ revival

Mumbai: Airline companies see in the recent circumstances rising out of a stronger rupee and a revival in air travel, an opportunity to aggressively push for new measures and bring themselves out of the red. The national aviation committee, recently constituted by the Confederation of Indian Industry (CII), will recommend a series of revival measures to the government, including rationalisation of taxes on aviation turbine fuel (ATF) and an end to monopoly in ground handling policy at various airports.
Airlines can look forward to a patient hearing of their demands. Alok Sinha, joint secretary in the civil aviation ministry, told
FE, “Any recommendations that can foster growth in the sector are most welcome by the ministry.”
Chaired by M Thiagarajan, managing director, Paramount Airways, CII”s aviation panel is actively considering factors which can help airlines stay afloat at a time when they are collectively projected to post losses of Rs 10,000 crore for the current fiscal. Also, various recommendations that are currently being reviewed by the committee will be presented to the civil aviation ministry and the finance ministry before the Union Budget is presented in February 2010.
A reduction in the costs incurred in repair and maintenance and high prevailing taxes on aviation turbine fuel (ATF) are vital to airlines. Moreover, ATF constitutes nearly 35-40% of the operating cost for airlines, which pay nearly 70% higher than their international counterparts due to arbitrary tax structures prevalent in the country. Airline operators pay 25%—35% taxes on ATF in different part of the country. The committee wants a uniform tax structure of 4% on ATF pan India.
08/12/09 Shaheen Mansuri/Financial Express

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Categories: Indian Aviation- In General Dec 2009