Fewer peak hours may clear the air

Civil Aviation Minister Praful Patel has agreed to offer incentives to carriers to fly during non-peak hours. The incentives are aimed at reducing congestion at metro airports.

Patel has also agreed to suggestion made by the CEO of an airlines to reduce the peak time to four hours, instead of the present seven.

After meeting CEOs of top airline companies today, he announced the peak hours would be from 8 am to 10 am and 5 pm to 7 pm.

It is pertinent to note here that the ministry is considering a proposal to levy congestion surcharge on airlines flying during peak hours.

"Whether we will have differential tariffs during different hours, to reduce congestion, has not been decided yet. However, we will incentivise carriers who fly during non-peak hours. A committee set up in the ministry has given various suggestions but we are yet to take a final decision," Patel said, adding that carriers cannot be forced to fly during non-peak hours.

Patel also agreed to a suggestion by the airlines' CEOs that the ministry take up the demand for reducing the sales tax on ATF (which averages around 23 per cent) to 16 per cent with the Empowered Committee of State Finance Ministers on VAT and CST. This could help airlines reduce fares by around 3 per cent.

The meeting was attended by Indian Airlines Chairman Vishwapati Tripathi, Air-India Chief V Thulasidas, Kingfisher CEO Vijay Mallya, Spicejet Director Siddhnath Sharma, Jet Airways CEO Wolfgang Prock-Schauer, and representatives from Air Deccan.

The CEOs also sought continuation of a scheme under which aircraft and aircraft engines taken on lease are exempt from withholding tax. Patel assured the CEOs that he would push their case with Finance Minister P Chidambaram.

The carriers are divided over Patel's suggestions to increase tariffs.

GR Gopinath of Air Deccan (who did not attend the meeting) has already made it clear the government needs to utilise infrastructure at airports better, rather than increase tariffs. However, Spicejet's Sharma, said the move could reduce costs for budget carriers.