The civil aviation minister as well as the airline companies have made the point repeatedly that the primary problem is the high cost of ATF in India, compared to other countries. This is true enough, but it is hard to see the finance minister listening sympathetically to their plea for international parity prices for ATF. If he is to drop taxes on petroleum products to the extent of Rs 5,000 crore and more, Mr Chidambaram would much rather do it on other petroleum products so as to yield greater political mileage than he will get from the airlines and air passengers. And the state governments have nixed the idea of cutting sales tax rates for ATF; indeed, of the two that have done so already, Kerala threatens to raise it back to the old level.
The correction, then, must come from elsewhere, and the only options within the airlines' control are to cut costs and raise fares. The headlines suggest that cost-cutting has begun in earnest