Kingfisher Airlines is bearing the brunt of a high cost regime in India, but the government can help by bringing jet fuel under the declared goods category, said its chairman Vijay Mallya on Saturday.
The move will reduce sales tax to 5% from the current ad valorem sales tax of up to 45% levied on jet fuel by some states. "The question is should governments enjoy a windfall when airlines are suffering," Mallya told ET on Sunday on the phone from Abu Dhabi, where he was watching the qualifying race of the Formula 1 Grand Prix. He said states should not impose such high taxes.
Mallya dismissed talk of Kingfisher facing a wrenching crisis. "It is a crisis depending on who is looking at the issue." The entire airline industry, he said, is going through a rough patch due to high costs and lower yields.
"Fuel costs in India are the highest in the world as are the landing charges at airports. The rupee has depreciated sharply this year. As a result, revenue yields have not matched expectations."
The flamboyant Mallya is oft called The King of Good Times, a moniker he shares with his beer brand. When asked if the title is appropriate in the light of his airline's troubles, Mallya said the tag has been thrust upon him by others. "I have many businesses. Now if they want to take the extreme step of writing me off because of one business, it is unfortunate."
Mallya said the airline has not approached the government for a bailout. "We have not asked the government for taxpayers' money."
13/11/11 Binoy Prabhakar/Economic Times
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