Friday, February 08, 2019

Aviation hopes rise as Thomas Isaac cuts fuel tax

Thiruvananthapuram: Domestic carriers now have an opportunity to save on operational costs and pass on benefits to passengers following the reduction of jet fuel tax on domestic flights from 28.75 per cent to 5 per cent. Will Finance Minister Thomas Isaac’s gesture result in proportionate lower fares, increased flight frequencies and adding of newer destinations?

Kannur International Airport Ltd managing director V. Thulasidas said the reduction in jet fuel tax for non-Udan flights would help increase the number of flights and passengers. The additional revenue would add to the state’s kitty, though the higher off-take of fuel on account of the tax cut may not totally offset the annual loss of `100 crore in tax revenue to the state.
Whether and how many new flights will be introduced by each domestic airline depends on the respective fuel cost reduction. The fuel tax applies only to domestic carriers as the Centre does not levy fuel tax on foreign carriers.

The winter schedule runs through March 31 and hence there is still time left for airlines to tweak their summer schedules, incorporating more domestic flights to Kerala destinations.

Mr Thulasidas commended the state government decision, recalling how the then government had reduced the fuel tax to 4 per cent ahead of starting the Kerala-centric Air India Express while he was the CMD of the national carrier. 
08/02/19 Deccan Chronicle