The Hindu Business Line : Praful Patel meets Chidambaram on `affordable' air fares

THE Minister for Civil Aviation, Mr Praful Patel, met the Finance Minister, Mr P. Chidambaram, on Thursday to discuss ways of making domestic air travel more affordable. Emerging from the meeting, Mr Patel said that issues connected with aviation turbine fuel (ATF) were taken up.

"All the airlines have been complaining about the rising cost of ATF. We discussed what needs to be done to make air travel more affordable. The hike in airfares are putting a burden on the consumers," Mr Patel said.

He said the issue of according ATF the status of `Declared good', which would ensure a four per cent sales tax on the fuel throughout the country, was also discussed. Currently, the sales tax on ATF varies from 39 per cent in Kerala to four per cent in Andhra Pradesh and Orissa.

ATF is one of the major cost components for all airlines, including the State-owned Indian Airlines (IA), which has estimated that fuel alone accounts for about 30 per cent of its domestic operating costs. The airline has estimated that a one-percentage point increase in ATF prices adds over Rs 14 crore per annum to its operating costs.

In the past few months, the cost of ATF has been moving northwards, touching an all-time high of Rs 26,000 per kilolitre this month.

To meet the rising ATF costs, the three major domestic airlines - Jet Airways, Air Sahara and Indian Airlines - have announced a 10 per cent hike in domestic fares from June 21.

On the issue of whether the Government is considering providing Rs 325 crore to Indian Airlines, as had been suggested by the Kelkar Committee, Mr Patel said that this issue was connected with the fleet acquisition plan of the airline.

He noted that the empowered group of ministers (e-GoM) is to be constituted soon.