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.
