www.bsnlnewsbyashokhindocha.blogspot.com



www.bsnlnewsbyashokhindocha.blogspot.com
Save us or we won't fly: Private airlines
Bangalore. Mumbai. New Delhi: In a move intended to pressurise the government to give in to their demand for lower taxes on jet fuel and reduced airport charges, private airlines on Friday threatened to ground domestic flights on August 18 if no 'bailout' is offered.

You may also want to see
Government warns private airlines against suspending operations
AI mulling cancellation of six B 777 aircraft deliveries
Trainer aircraft crashes in Andhra Pradesh, two killed
Boeing rolls out P-8A Poseidon; India to be the first buyer
Try out non-veg, Air India tells vegetarian passengers
But even as the airlines -- Kingfisher, Jet, JetLite, Spice Jet, GoAir and IndiGo -- announced this, they said that travellers would not be inconvenienced as their ticket prices would be refunded well in advance. International flights would operate as per the day's schedule.

The decision taken by the Federation of Indian Airlines (FIA) to suspend domestic flights on August 18 came after a long meeting in Mumbai attended by heads of all domestic carriers, except state-owned Air India and Chennai-based business-class airline Paramount Airlines.

Vijay Mallya, chairman of Kingfisher Airlines, said carriers have been forced to take such a firm stand because the government has refused to listen to their long-pending requests."We certainly don't want to go on strike but we would like the government to be aware of what the consequences would be when private airlines do not exist.

Therefore, we decided that all of us will suspend flights ... for a day," he said. He added that the airline industry was mired in losses of Rs10,000 crore and soaring operating costs would take them deeper into red.He said his airline may have to suspend domestic flights indefinitely.

In Delhi, civil aviation minister Praful Patel expressed displeasure with the decision, saying: "The government does not support any move that will inconvenience the public".

While assuring that the government understood their problems, the minister advised the private carriers to engage in a dialogue. Patel also made it clear that Air India would not take part in the "decision of select private airlines" and will mount additional services on August 18 to reduce inconvenience to the public. He also reasoned with the private carriers over their demand for cheaper ATF saying the taxation issue rested with state governments.

The two major demands of the airlines are to rationalise the sales tax on aviation turbine fuel (ATF) -- jet fuel -- by bringing it under declared goods category, and slash the exorbitant airport charges. Once ATF comes under declared goods, it will attract uniform sales tax of 4%. Today, different state governments levy different rates of sales tax averaging at around 26% for the airlines. Sanjay Aggarwal, chief operating officer (CEO) of budget airline SpiceJet, said rationalisation of sales tax on ATF will impact the cost structure of low cost airlines by 7-8%.

Currently, aircraft fuel expenses constitute over 30% of the total operational costs of airlines while airport charges are 10%.And even though Air India will not participate in the protest, its spokesperson Jitendra Bhargava said: "we share the concerns of airlines, which are being expressed by industry leaders. We would welcome whatever relief that the government can give."

On the legality of this move, Anil Baijal, secretary-generalof FIA, said: "As far as the legalities are concerned, this is a well-configured decision of the private airlines."

www.bsnlnewsbyashokhindocha.blogspot.com