The Hindu Business Line : Airlines asked to report on impact of aviation fuel duty cut on fares

Trimming losses: (From right) The Secretary Civil Aviation, Mr Ashok Chawla, with the Jet Airways CEO, Mr W. Prock Schauer; Director, SpiceJet, Mr Ajay Singh, and senior officials of domestic airlines at a meeting in the Capital on Wednesday.

Our Bureau

New Delhi, June 4 The Ministry of Civil Aviation has asked domestic airlines to report back in the next few days on whether lowering the prices of aviation turbine fuel (ATF) will lead to any benefits for the passengers and what quantum of losses being reported are on account of increase in fuel prices.

“Before the Ministry can make a plea for lowering taxes levied on ATF, we need to know whether any reduction will lead to airlines lowering fares or holding them at the current levels,” a senior Ministry official said after a meeting the Chief Executive Officers of various airlines had with Secretary Civil Aviation, Mr Ashok Chawla.

The meeting was held to prepare the grounds for a proposed meeting between Prime Minister, Dr Manmohan Singh, and the Minister for Civil Aviation, Mr Praful Patel, on steps that need to be taken to ensure that growth of the industry is not hampered.

At the moment industry is reeling under heavy losses, which could cross Rs 4,000 crore during 2007-08 and double to Rs 8,000 crore in the following years, Mr Chawla said.

“Oil prices are at all-time high and airline operators are finding it difficult to make both ends meet.

“In fact there are substantial losses being reported by the airlines,” the Secretary added.

The industry also indicated that it may have to reduce capacity i.e., the number of flights operated to offset the increase in costs and lower passenger carriage.

Airline ombudsman

At the meeting a deadline of August 1 was set for each airlines to appoint an ombudsman to look into complaints of passengers. The airlines were informed that Performance Based Navigation system would start at Delhi, Mumbai and Ahmedabad airports which would increase the number of aircraft movements there.

The introduction of the new system will reduce the minimum distance that is currently maintained between two aircraft thereby allowing more aircraft to operate at these airports, officials said.

In Delhi, the new third runway will also become operational and simultaneous use of the runways will be allowed to ensure that the number of aircraft movement increases.

Panel formed

A 10-member committee is also being set up to look at issues connected with airports.

“The committee will look into various aspects including the ground handling charges, how to better manage the slots at the airports among other issues,” officials said.

The meeting was attended by the President and Chief Executive Officer, IndiGo Airlines, Mr Bruce Ashby; the Chief Executive Officer, Jet Airways, Mr Wolfgang Prock-Schauer; and Director, SpiceJet, Mr Ajay Singh; among others.