Charter operators seek fair play in fuel pricing

New Delhi: Indian charter operators have opposed the decision to have a differential pricing formula for aviation turbine fuel which will see their jet fuel expenses double from April. Jet fuel prices for non-scheduled operators have more than doubled starting April, though the government decided to cushion commercial airlines with oil marketing companies absorbing 75% of the hike to prevent a fare hike.

Business Jet Operators Association (BAOA), the body which represents more than 80 operators, termed the move discriminatory.

In a letter to the civil aviation minister Ram Mohan Naidu BAOA pointed out that charter operators consist not only of luxury jets operated by businessmen, but many such operators actively engage in disaster relief and emergency response missions, operating air ambulances in remote areas and offer support for internal security requirements of police and defence authorities.

Also Read: Petrol at Rs 72, diesel at Rs 69 in Delhi? How GST could slash fuel prices in India

Such a differential model of pricing for jet fuel applied within the same category of public commercial air transport operations is inappropriate and discriminatory in effect, and runs contrary to the fundamental principles of non-discriminatory treatment enshrined in our constitutional framework, RK Bali, managing director of BAOA told ET.

"It is also a retrogressive step in the context of the National Civil Aviation Policy 2016, which emphasizes regional connectivity-an area where non-scheduled operations are critical. We urge that this anomaly be corrected immediately to ensure fairness and protect essential operations," Bali said.

For India's charter operators, the cost of operations is very high as they face higher expenses from increased landing and parking charges at airports, a very small pool of pilots, increasing manpower costs and a significantly higher tax structure compared to commercial airlines.

Also Read: Fuel prices aren’t airlines’ only headache

The move, charter operators said, will also significantly hurt the government's effort for helicopters for emergency medical service. "The government in 2021 had identified 10 cities and 82 routes to streamline helicopter corridors and helipad approvals, but hardly anything has moved because there is little policy support. The jet fuel price decision will further create problems for the industry," an executive of a helicopter company said.

While crude prices have risen following the conflict in West Asia, the surge spread faster as supply disruptions intensified after Iran threatened to close the Strait of Hormuz. From $24.28 per barrel in the last week of February, the spread shot up to $86.22 by March 20, a jump of over 250%, according to the International Air Transport Association (IATA).