New Delhi Civil Aviation Ministry asks for Lower Taxes on Jet Fuel

The New Delhi Civil Aviation Ministry has confirmed its mission to push more state governments into lowering taxes on jet fuel in a bid to ease the pressure on airlines with the rise in crude oil prices and the weakening value of the rupee.  This slide against the US dollar raises concerns as to the increase in prices that the struggling airlines will have to face for leasing commitments, maintenance and repairs, payments to expat crew members and staff costs abroad.

GoAir CEO Giorgio De Roni, said “Almost all airline costs are related to the dollar, including fuel. We have to face this reality. A week rupee is a big challenge for the industry.”

“The rise in ATF (aviation turbine fuel) prices will have an impact. We have been requesting the state governments to consider reduction in taxes they levy on ATF, keeping in mind the rising oil prices,” said Civil Aviation Secretary, K N Shrivastava.

Although some states, namely, Chhattisgarh, Rajastan, West Bengal, Jharkhand and Madhya Pradesh have brought down the taxes on jet fuel, the CAM are ‘pursuing other states to follow suit’, promising increased air connectivity in return.

This all comes with the added concern of price rises in air fares to sustain the airlines, which no one wants.

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