Industry & Economy
-
Budget
Logistics
-
Airlines
Reprieve for domestic aviation
Our Bureau
New Delhi
,
Feb. 28
THE domestic aviation industry has got a reprieve for another six months with the Finance Minister, Mr P. Chidambaram, extending till the end of September the exemption from tax on agreements to acquire aircraft or aircraft engines on lease.
The proposal, which was first mooted by the Finance Minister in his 2004-05 Budget, proposed the withdrawal of tax exemption on any payment made by an Indian company to acquire an aircraft or its engine from a foreign state or enterprise. Implementation of the proposal would have meant a tax rate of more than 40 per cent on aircraft being leased. This is the second time that implementation of the proposal has been deferred. Earlier, the exemption of the withdrawal was to come into effect from September 1, 2004, but Mr Chidambaram agreed to defer it to the end of April 2005 .
The move will help almost all the airlines as almost every one is looking at the leasing option to help them chart their growth plans. While Indian Airlines has already issued tenders for leasing up to 12 wide body aircraft, the board of Air India has also approved a proposal to lease 18 Boeing 737-800 aircraft that will be used to start the new low-cost airline, Air India Express Ltd.
Major players in the private sector too are operating with leased aircraft. While 18 aircraft in Jet Airways' 42-aircraft fleet are leased, all 20 aircraft in Air Sahara's fleet are on lease.
Welcoming the proposal, the Chief Operating Officer of the soon to be launched Kingfisher Airlines, Mr Alex Wilcox, said that the move gave the airline an opportunity to take "a few more months to complete leasing of aircraft."
If the proposal had not been accepted the airline might have been forced to consider another method of financing, Mr Wilcox said.
The Managing Director of Air Deccan, Captain G.R. Gopinath, said that the continuation of the proposal would help first generation entrepreneurs. "The proposal is far-reaching and will help create the right environment for first generation entrepreneurs to enter the market," he added.
Suggested Box: Indian Airlines has been provided a budgetary support of Rs 325 crore that should help the airline in its proposed acquisition plan of inducting 43-Airbus aircraft.
Article
E-Mail
::
Comment
::
Syndication
::
Printer Friendly Page
|
