ATF duty cut set to fuel growth of small airports

MUMBAI: In a bid to promote aviation activity in Maharashtra���s Tier-II and Tier-III cities, the state budget has announced a heavy reduction in duty on aviation turbine fuel for aircraft outside Mumbai and Pune. Finance minister Jayant Patil told the legislature that the ATF duty had been reduced from 25% to 4% on fuel supplied to aircraft in places like Nagpur, Aurangabad, Amravati, Akola, Nanded and other smaller cities.

���All these cities are emerging as developing centres of trade and industry. It is necessary to encourage air travel in these places. Purchase of fuel is an important item in the balance sheets of airlines and a reduction in ATF duty should work as an incentive for more air traffic in places other than Mumbai and Pune where the ATF would be charged at the statutory 25%,��� Mr Patil said.

The state budget also took note of the tremendous increase in air traffic across the state in recent years. Mr Patil said the state has planned to provide impetus to development of more airports to cater to the increase in aviation activity. In fiscal 2008-09, the state government would support development of airports at Shirdi, Solapur, Amravati, Jalgaon, Nanded and Latur.

Mr Patil also sounded confident about the Airport Authority of India handing over the Nagpur airport to a joint venture company between AAI and the Maharashtra Airport Development Company ���within few weeks���. The modern Nagpur airport would be spread over an area of 12,000 hectare.