Date:10/05/2008 URL: http://www.thehindu.com/2008/05/10/stories/2008051054771400.htm

National

Minister for ending “plight” of airlines over high ATF prices

Special Correspondent

To make a request to Prime Minister to intervene

Favours reduction of taxes on ATF
“Aviation industry needs our support”

NEW DELHI: The time has come for the government to intervene and help the growing civil aviation industry in the wake of skyrocketing prices of aviation turbine fuel (ATF), Civil Aviation Minister Praful Patel said here on Friday.

“High prices of jet fuel have dealt a severe blow to the airlines. Air travel is no more a luxury but just another mode of travel. The aviation industry is an important contributor to the economic growth. All States and the Centre should pay urgent attention to the industry,” Mr. Patel told reporters here.

Favouring rationalisation of sales tax, excise and customs duty structure on ATF, he said that at Rs.61,000 a kilo litre, the ATF in India was costlier than in Singapore, where it cost Rs.32,000 a kilo litre. The ATF price constituted 15 to 20 per cent of the total cost of operation of an airline abroad. But in India, it had zoomed to 40 to 45 per cent.

“Acute crisis”

While ATF prices increased six-fold since 2004, airlines did not increase their fares in that proportion, Mr. Patel said adding that the carriers were facing acute crisis and their load factors were dropping.

“I would request Prime Minister Manmohan Singh to intervene and also meet Finance and Petroleum Ministers to take steps for helping the industry. Airlines, the world over, are bleeding and suffering losses due to high cost of jet fuel. For us too, it is a matter of serious concern. The aviation industry needs our support and the government has to find ways and means to help it.”

Andhra Pradesh and Kerala had paid heed to his appeal and lowered taxes to 4 per cent on the ATF, he pointed out.