SpiceJet shelves fuel import plan

Mumbai: Budget carrier SpiceJet has shelved its plan to directly import Aviation Turbine Fuel (ATF) citing operational challenges.

“We did a proof of concept last year and then decided to put the idea on hold. Theoretically, importing ATF is a great opportunity to reduce fuel costs but we do not think that we are still ready for it yet,” a SpiceJet spokesperson told Business Line.

SpiceJet, which is promoted by billionaire Kalanithi Maran, had become the first Indian carrier to receive approval from the Director General of Foreign Trade (DGFT) to import ATF in 2012.

Tata to build air refuelling unit

Hyderabad: Hyderabad-based Tata Advanced Systems (TAS) Limited said on Friday that it will manufacture world-leading 5th generation air-to-air refuelling equipment for the UK defence and aerospace major Cobham at its facility in Hyderabad.

“During a rigorous sourcing and selection process, Tata Advanced Systems was able to prove world-class capabilities and the capacity to support delivery against Cobham’s requirements,” TAS said in a statement on Friday.

Cobham manufactures a range of aerial refuelling equipment, including pods integrated onto the Airbus A330 Multi-role Tanker Transport, a platform that India ordered in 2013.

Centre to persuade states to lower sales tax on ATF

New Delhi:  The Centre is to make another attempt to convince states on the need to bring down the operating costs for domestic airlines.

With this objective in mind, Ashok Gajapathi Raju, the newly appointed Union Civil Aviation Minister, has called a meeting of civil aviation ministers of the states and union territories here on August 21.

A senior officials of the Ministry told Business Line that at the meeting another attempt will be made to convince the states to bring down the high sales tax that some charge on aviation turbine fuel. At the moment, the sales tax on ATF varies from 4 per cent to over 30 per cent. The Centre will make an attempt to explain the multiplier effect of a vibrant aviation sector to the economies of the states.

GMR seeks reduction of VAT on jet fuel

Hyderabad: In order to boost the aviation and aerospace industry in the State, the GMR group which operates and runs the international airport at Shamshabad here, has requested Chief Minister K. Chandrasekhar Rao to reduce the Value Added Tax (VAT) to four per cent on Aviation Turbine Fuel (ATF) and take some other measures too.

Mr. Rao has in turn agreed to consider the proposal, according to CMO sources. Making a power point presentation, the GMR group representatives explained that addressing the VAT issue would bring in more airlines to Hyderabad. They pointed out that airlines in the city have withdrawn/reduced frequency by 13 per cent in the financial year 2013, and thus far, this year there has been a four per cent reduction.

BIAL in Talks with Karnataka Govt to Cut ST on Jet Fuel

Bangalore:  Bangalore International Airport Limited (BIAL) is in talks with the government of Karnataka to bring down sales tax on Aviation Turbine Fuel (ATF) to encourage more airlines to set up base in Bangalore and promote tourism in the state.

This is part of BIAL’s home carrier advantage plan wherein airlines stand to benefit with concessions from the airport operators  provided the airline can achieve a throughput of at least 1 million additional and have  the highest number of night parked aircraft in KIAL among other conditions. But high sales taxes in Karnataka has been the deterrent for many carriers so far.  At present, sales taxes in Karnataka is amongst the highest in the country at 28%.

Government raises jet fuel price

Mumbai: On Tuesday, the prices of jet fuel and non-subsidised liquefied petroleum gas (LPG) were raised 0.5 per cent and Rs 16.5 a cylinder, respectively. This follows an increase in global oil prices due to the crisis in Iraq.

The price rise comes a day after oil marketing companies increased petrol prices by Rs 1.69 a litre and diesel prices by 50 paise a litre. While there is no subsidy on petrol and jet fuel, the phased 50 paise/litre rise has widened the revenue loss on diesel to Rs 3.4 a litre According to a Press Trust of India report, the loss stood at Rs 1.62 a litre last month.

Aviation fuel racket busted in Bangalore

Bangalore: The Food Department has unearthed a racket in which Aviation Turbine Fuel was being siphoned off by tampering with the tankers that transported fuel to the airport. This is believed to have a national ramification. Aviation fuel, which can be used as substitute for diesel, is suspected to have been sold to tar-manufacturing units.

Announcing this at a press conference here on Thursday, Minister of State for Food and Civil Supplies Dinesh Gundu Rao said that aviation fuel was being siphoned off during transportation to Kempe Gowda International Airport at Devanahalli. The transporters had tampered with the tankers carrying aviation fuel to facilitate siphoning-off.

JK can trim down ‘rising’ airfare, says DGCA

Srinagar: The Union Ministry of Civil Aviation has passed the buck on expensive airfares to Jammu and Kashmir on the state government saying initiatives like decrease in Value Added Tax (VAT) on fuel and underwriting of seats can bring the ticket prices to the desired levels.
Responding to the notice issued by Jammu and Kashmir State Human Rights Commission (SHRC), the Directorate General of Civil Aviation (DGCA) has said the state governments are important stakeholders as far as airfare pricing is concerned.
“Initiative of the state government on reduction of charges under their control like VAT on fuel lifted from within the state, underwriting of seats etc. may bring the airfares to the desired levels,” DGCA writes in its response to SHRC notice.

Have asked states to cut jet fuel tax, aviation minister says

New Delhi: Civil aviation minister Ashok Gajapathi Raju said on Tuesday he had asked states to cut jet fuel tax, which the country's struggling airlines say makes it difficult for them to stay profitable.
Raju said he believed aviation turbine fuel (ATF) was "taxed on the higher side" and that states should "bring down" the tax, without indicating what he considered an appropriate level.
High taxes — many of them set by individual states rather than central government — low fares and a highly competitive market mean all but one of India's big airlines are losing cash. Fuel costs are among the highest in the region.

Aviation ministry to press for airlines' direct import of fuel

New Delhi: The ministry of civil aviation is to recommend that oil marketing companies be asked to share their infrastructure with airlines, to facilitate direct import by the latter of aviation turbine fuel (ATF).

Such direct import was formally allowed in February 2012 but the aviation companies lack the infrastructure to do so. A senior official at the ministry said, “We are looking at measures by means of which oil companies can share their infrastructure for transporting the fuel. This can be done at an agreed cost.”

Fuel costs are half the operational expenses of an airline in India. The value added tax on ATF ranges from four per cent to 30 per cent, depending on the sales tax levied by a state. If an airline can import fuel directly, it would only have to pay customs and countervailing duties, saving on state levies.