Airlines fly high on 5% cut on ATF custom duty
The aviation sector is, however, a gainer. The government’s decision to reduce customs duty on aviation turbine fuel (ATF) by 5% is would reduce the rising fuel cost for the sector marginally.
By TNN |
The aviation sector is, however, a gainer. The government���s decision to reduce customs duty on aviation turbine fuel (ATF) by 5% is would reduce the rising fuel cost for the sector marginally. But domestic airlines, flying on a narrow profit margin, are in no mood to pass on the benefit to their customers.
���It is a welcome relief, though it���s too little and too late. As of now we don���t think the benefit will be passed on to the consumer as we are passing on only a part of the increase in our total fuel costs (around 35%) to passengers in the form of fuel surcharge,��� says Jitendra Bhargava, spokesman of Air India. Airlines are, however, not able to quantify their gains.
���We will have to wait and see how significant is the impact on ATF price,��� says Partha Sarthi Basu, CFO, SpiceJet. The sector is more interested in a rationalisation of sales tax structure. ���The need is to reduce sales tax. In India, we are paying absurd price for ATF because of the taxes, which are on top of the high crude oil prices,��� says Jeh Wadia, MD, GoAir.
���It is a welcome relief, though it���s too little and too late. As of now we don���t think the benefit will be passed on to the consumer as we are passing on only a part of the increase in our total fuel costs (around 35%) to passengers in the form of fuel surcharge,��� says Jitendra Bhargava, spokesman of Air India. Airlines are, however, not able to quantify their gains.
���We will have to wait and see how significant is the impact on ATF price,��� says Partha Sarthi Basu, CFO, SpiceJet. The sector is more interested in a rationalisation of sales tax structure. ���The need is to reduce sales tax. In India, we are paying absurd price for ATF because of the taxes, which are on top of the high crude oil prices,��� says Jeh Wadia, MD, GoAir.
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