Wednesday, September 26, 2018

Duty on aviation turbine fuel to hit airlines; fares likely to go up

New Delhi: With the government imposing customs duty on aviation turbine fuel, airlines are likely to pass on higher costs to passengers as peak travel season is round the corner.

Rising fuel prices, intense competition and an inability to pass on spiralling expenses have been negatively impacting the domestic airlines. The latest decision to impose 5 per cent customs duty on ATF, which is a major component of an airline's operational costs, would add to the woes, according to experts.

In recent weeks, the airline industry has indicated that air ticket prices could go up in October when the peak travel season begins.
Travel portal's COO (B2C) Sharat Dhall said the imposition of 5 per cent customs duty on ATF is bound to have a "negative impact" on the carriers.

On Wednesday, the government raised import duties on ATF and 18 other items, as it looks to check the widening current account deficit.

Grappling with soaring costs, airlines have been seeking reduction in taxes and duties related to the aviation sector.
26/09/18 PTI/Business Standard