The Hindu Business Line : Bring ATF under declared goods, says Mallya

Mumbai June 13 Aviation turbine fuel should be brought under the "declared goods" category so that it will invite a flat sales tax of four per cent, said the Chairman of UB Group, Mr Vijay Mallya, addressing a convention organised by Centre for Asia Pacific Aviation in Mumbai.

Separate sales tax in various States would "cause a dent in economics of any airline," he said.

He also said budget carrier Deccan Aviation Ltd, in which he acquired a 26 per cent stake for Rs 550 crore recently, would become profitable by the end of the current fiscal. "Air Deccan just needs to price its fare at Rs 500 more per ticket for it to become profitable," said Mr Mallya, who is also the Chairman and CEO of Kingfisher Airlines.

In his wish list for the aviation industry was also a request to the oil companies to supply ATF at a rational price, "as they export it at a much lesser price as compared to what they sell to Indian carriers."

On the matter of private airports, he said apart from new equipment for better air traffic control training of Air Traffic control staff should also be looked into.

Mr Mallya also said the Government should work towards making the military and defence airport infrastructure available for commercial operations, adding more efficiency to the aviation sector in India.

Kingfisher Airlines' international strategy is to be more focussed on the US sector. The airline will be flying non-stop from Bangalore to San Francisco and to New York, once it gets its Airbus 340 in February next year. The airline also plans services to London when it receives its 10 wide-bodied Airbus 330s, to be delivered between February and August 2008.

Between Air Deccan and Kingfisher, the group has a combined order of 88 Airbus and 50 ATR aircraft to be delivered by 2011, said Mr Mallya.

Talking of operations to West Asia, he said once the Government gives the go ahead for it, he would ask for Air Deccan to be allowed operations to that region.

On the issue of cartelisation in the Indian aviation sector, which the Civil Aviation Minister, Mr Praful Patel, had said would not be allowed by the Government, Mr Mallya said with three major groups that are emerging a cartel is unlikely. But they would definitely rationalise the market in terms of prices, taking it towards the profitability route.

However, he did mention that the current supply of aircraft is more than the demand and therefore the group would also look at some fleet management and adjustment between Air Deccan and Kingfisher.

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