Airline heads meet PMO, discuss concerns on high fuel cost

Airline industry bigwigs met the Prime Minister’s Office (PMO) on Saturday with a wishlist that could help them fly into the black. The sector is estimated to post losses of around $3 billion in FY11-12, according to Centre for Asia Pacific Avation (CAPA)
The meeting was attended by industry bigwigs like Naresh Goyal, chairman, Jet Airways , Vijay Mallya could not attend the meeting but Sanjay Agrawal, Kingfisher’s CEO along with Aditya Ghosh, CEO of Indigo Airlines amongst other operators gave their valuable suggestions at the meeting.
Five years ago, when aviation turbine fuel cost around $60 for a barrel, they never complained paying a sales tax of anything between 25-33% on the commodity. But now, when fuel is priced at $115/bbl, they are being charged the same rate of tax, so where is the government support for aviation?
Industry representatives pointed out that the price which they pay to buy ATF is 70% higher then what carriers pay in other parts of Asia. “If ATF is brought under declared good category, it will attract a uniform sales tax of 4%,” said one of the airline operators during the meeting, according to a source.
ATF constitutes 40% of the operating cost to an airline and with its price escalating quarter-on-quarter, operators are facing margin pressure.
28/11/11 Moneycontrol.com

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Categories: Indian Aviation- In General Nov 2011