The civil aviation ministry is likely to ask the government to set up a Group of Ministers (GoM) to resolve the problems faced by the aviation industry, especially on account of high taxes on the aviation turbine fuel, or ATF, said an informed source.
The airlines also demanded that the credit period for oil dues should also be increased, said another source.
After an hour-long meeting between Civil Aviation Minister Praful Patel and all major Indian carriers today, informed sources said a detailed presentation on the problems being faced by the ailing aviation industry was likely to be made at the Cabinet meeting on Thursday by the aviation minister.
“We are satisfied with the minister’s assurance that he will take up our issues on an urgent basis. The ministry is sympathetic towards the problems of the industry and the minister has promised help in taking up the issues with the government,” Kingfisher Airlines CMD Vijay Mallya told reporters after the meeting.
The meeting was also attended by Air India CMD Arvind Jadhav, Jet Airways Chairman Naresh Goyal, SpiceJet CEO Sanjay Agarwal, IndiGo Chairman Rahul Bhatia and President Aditya Ghosh, GoAir MD Jeh Wadia and Federation of Indian Airlines (FIA) Secretary General Anil Baijal. Civil Aviation Secretary M M Nambiar was also present.
The private airlines had recently abandoned a plan to ground flights on August 18 to protest the high tax on ATF imposed by the state governments and the high airport charges, which was later called off.
On the high cost of ATF, which accounts for almost 40 per cent of an airline’s operating cost, the sources said that the oil companies would be requested to reduce the base price at which jet fuel was sold to the airlines.
As the taxation issues primarily concern the state governments, which earn substantially from imposing the sales tax on jet fuel, the Centre has maintained that nothing much could be done on this count as any step would lead to reducing the states’ revenue earnings.
So far as high airport charges are concerned, the airlines were told at the meeting to approach the Airports Economic Regulatory Authority (AERA), set up recently to fix and regulate airport tariffs and settle disputes.
The airlines also wanted the government to take steps to reduce the impact of their foreign exchange outgo on account of purchasing aircraft spares, which is a major recurring expense, the sources said.
Patel had earlier led a delegation of the airline industry and met the prime minister as well as the finance minister. He had also made a presentation before the Empowered Group of State Finance Ministers, headed by West Bengal Finance Minister Asim Dasgupta, on these issues.
