Direct import of fuel to help cash-strapped airlines, feel industry bodies

NEW DELHI: Welcoming the government notification allowing direct import of aviation turbine fuel ( ATF), industry bodies CII and FICCI today said the move would help the cash-strapped airlines to reduce costs.

"This decision would help airlines to reduce costs on account of ATF which constitutes around 45 per cent of their operating costs," CII Director General Chandrajit Banerjee said in a statement.

"It would lead to huge saving on fuel cost which is almost 60 per cent of the overall cost," Ficci Secretary General Rajiv Kumar said.

The aviation industry, which is going through a bad phase, has been demanding direct imports for long, Kumar said, adding the move would be a great help for the beleaguered airlines.

However, Banerjee said transportation and storage infrastructure for supply of ATF would be a critical challenge for airlines.

Now, the airlines would be allowed to import jet fuel under the so-called open-general license, enabling them to avoid sales taxes of between 12 to 23 per cent that are levied by state-governments.

"...Indian carriers which are interested to avail the opportunity to import ATF directly without going through State Trading Enterprises route may apply to the Directorate General of Foreign Trade (DGFT)," the official statement today said.