Air India, IndiGo and SpiceJet have told the Union government that the country’s aviation sector is on the verge of “stopping operations”, and have sought a revision in aviation turbine fuel prices amid the conflict in West Asia, PTI reported on Tuesday.
“In order to survive, sustain and continue operation, we request your urgent intervention for immediate and meaningful financial support to tide over the current situation,” the Federation of Indian Airlines said in a letter on April 26. The federation represents the three airlines.
This came against the backdrop of the West Asia conflict, which began on February 28 and has disrupted energy supplies to India. The war has also pushed up global oil prices and led to airspace restrictions that have increased operating costs. ATF accounts for about 40% of an airline’s operating expenses.
In its letter, the federation urged the civil aviation ministry to use a uniform fuel pricing system for domestic and international operations, NDTV reported.
“Any ad hoc pricing [domestic vs international] and/or irrational increase in the price of [aviation turbine fuel] will result in unsurmountable losses for airlines and will lead to grounding of aircraft, resulting in cancellation of flights,” PTI quoted the federation as saying.
The airlines have also sought that the excise duty on aviation turbine fuel, currently set at 11%, be temporarily deferred.
Last month, the governmentcapped the hike in aviation turbine fuel for domestic operations at Rs 15 per litre, but increased the rates for international operations by Rs 73 per litre.
The Federation of Indian Airlines said that this made both international and domestic operations unviable, leading to losses for the aviation sector this month PTI reported.
The airlines said that Delhi, the country’s largest aviation hub, has the second-highest value-added tax on aviation turbine fuel at 25%. The highest rate, 29%, is charged in Tamil Nadu, they said.
“The other major aviation cities…Mumbai, Bangalore, Hyderabad, and Kolkata range between 16% and 20%,” the news agency quoted the federation as saying. “These six cities cover more than 50% of airlines’ operations within India.”
Since the conflict in West Asia broke out, Iran has effectively blocked the Strait of Hormuz, the narrow waterbody connecting the Gulf to the Arabian Sea, for most international commercial vessels. About 20% of global petroleum supply passes through the maritime chokepoint.
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