Airlines may pass burden on to passenger with fare hike

Hyderabad: The imposition of 10 per cent service tax on the airline industry coupled with the 5 per cent customs duty on crude oil in Union Budget 2010-11 may force domestic airlines to raise fares soon.
On the sidelines of Day 1 of India Aviation 2010 — jointly organised by Ficci and the civil aviation ministry — honchos of the airline industry came together to discuss the recent Budget implications. Fares, which have seen a relatively stable run so far, might be revised soon. On the issue of fare hike, Kingfisher Airlines chairman Vijay Mallya said, “It would be difficult to determine the exact quantum of fare hike. Next week, the picture will be clearer after we review the fares.”
While India’s largest private carrier Jet Airways echoed similar views, the airline denied that the issue of fare hike was discussed at the meeting under the banner of the Federation of Indian Airlines today. “We didn’t discuss fares at the meeting. However, we discussed the problems of service industry with the minister,” said Jet Airways chairman Naresh Goyal.
Airlines requested civil aviation minister Praful Patel to take up the issue with the finance ministry for withdrawal of the service tax and 5 per cent customs duty, which the minister said would be taken up soon.
04/03/10 Smita Aggarwal/Indian Express

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Categories: Indian Aviation- In General Mar 2010