New Delhi: The CEOs of all domestic airlines are expected to raise the
high cost of operations in India impacting their bottomlines in their
first meeting with the Civil Aviation Minister, P Ashok Gajapathi Raju,
tomorrow. Leaders from SpiceJet, IndiGo, GoAir, Air India, Jet Airways,
Vistara and AirAsia India are expected to attend this meeting.
The meeting comes even as aviation regulator DGCA is drawing up a comprehensive report on the financial health of airlines and sources in the regulator have pointed to at least two airlines which are in deep financial difficulties. It is not clear when this report will be submitted to the Ministry by DGCA.
Topmost on CEOs' agenda tomorrow could be the high taxtaion on ATF. India is among the countries which tax aviation turbine fuel (ATF) among the highest in the world. ATF accounts for almost half of an airline's opertating costs but Raju may not be able to help here much since taxation of ATF is a state subject. States levy anywhere between 4-35% sales tax on ATF, making it very expensive - some have relented but most continue with the high taxation regime. CEOs are expected to urge the minister to persuade states to lower taxes, something Raju has promised to do earlier as well.
Then, often in the past, airlines have also expressed opposition to high airport charges, specially at the two showpiece airports of Delhi and Mumbai which are operated by consortia.lead by private developers. This issue should also figure in tomorrow's meeting since these costs adversely impact airlines' already bleeding balance sheets.
Read news in full 22/09/14 Sindhu Bhattacharya/FirstBiz
The meeting comes even as aviation regulator DGCA is drawing up a comprehensive report on the financial health of airlines and sources in the regulator have pointed to at least two airlines which are in deep financial difficulties. It is not clear when this report will be submitted to the Ministry by DGCA.
Topmost on CEOs' agenda tomorrow could be the high taxtaion on ATF. India is among the countries which tax aviation turbine fuel (ATF) among the highest in the world. ATF accounts for almost half of an airline's opertating costs but Raju may not be able to help here much since taxation of ATF is a state subject. States levy anywhere between 4-35% sales tax on ATF, making it very expensive - some have relented but most continue with the high taxation regime. CEOs are expected to urge the minister to persuade states to lower taxes, something Raju has promised to do earlier as well.
Then, often in the past, airlines have also expressed opposition to high airport charges, specially at the two showpiece airports of Delhi and Mumbai which are operated by consortia.lead by private developers. This issue should also figure in tomorrow's meeting since these costs adversely impact airlines' already bleeding balance sheets.
Read news in full 22/09/14 Sindhu Bhattacharya/FirstBiz
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