Praful Patel to meet PM, plead for airlines

AXE THE TAX: Civil Aviation Minister to meet the PM for tax relief.

Other stories in the section:

No wage cut, Praful Patel assures A-I employees

Minister of Civil Aviation says reports of a 25-pc salary cut are rumours.

• No wage cut, Praful Patel assures A-I employees
• Losses of Indian airlines may double

Featured Blog

Rajdeep Sardesai

Bhiwani to Beijing: Lessons from a journey

Featured Slideshows

Related Headlines

powered by

• No wage cut, Praful Patel assures A-I employees
• No wage cut, Praful Patel assures A-I employees
• Losses of Indian airlines may double

Keywords: ATF, Manmohan Singh

New Delhi: Civil Aviation Minister Praful Patel will meet Prime Minister Manmohan Singh on Wednesday to discuss rising aviation fuel prices that have caused massive losses to airlines.

Government sources says Patel will ask for aviation turbine fuel (ATF) to be brought under declared goods category, which will bring down the sales tax to a uniform 4 per cent across the country.

Industry sources say if ATF, which forms to about 50 per cent of airlines’ operating costs, is brought under declared goods category they will be able to save over Rs 4,000 crore this year and will passed on the benefit to the consumer.

“These are extraordinary situations and the aviation industry is in deep financial crisis especially due to high cost of fuel. We understand it's a global phenomenon but if there's slowdown in aviation, it will have an impact on Indian economy and on the ability of the average people who have start flying now,” Patel told CNN-IBN.

Worldwide, about 24 carriers have gone bankrupt in the last six months due to high ATF prices. In India airlines are struggling and analysts some low cost airlines might have to shut down by the end of this year if fuel prices move up at this rate. For an industry struggling to raise funds the tax cut will come as a welcome relief.

Airlines are estimated to lose over Rs 8,000 crore in 2007-2008 due to the high fuel prices.