Govt airlifts aviation sector, scraps ATF duty

SMOOTH LANDING: Airline companies say it is too early to say whether the drop can be passed on to customers.

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New Delhi: The sinking Airline companies have got a lifeline from the government.

Customs duty on aviation turbine fuel (ATF) has been done away with. Adding to this is a 6000 rupee per kilolitre drop in jet fuel prices by oil companies.

Taken together, it means a 16-17 per cent cut in ATF prices.

However, Airline companies say it is too early to say whether the drop can be passed on to customers in the form of lower air fares.

If they do, it will alleviate the pain of passengers who will have to pay a transaction fee on air tickets from Saturday.

The fee will hike domestic fares by upto 500 rupees and international travel by upto 10,000 rupees a ticket. Analysts feel there's a positive side to the move.

CEO, Indian Subcontinent and Middle East, Centre for Asia Pacific Aviation Kapil Kaul feels that this will move the clutter from the market and only the real players would now exist, the transaction fee will help agents to book higher profits and airlines will now get some relief.

However, travel agents protest saying this will lead to widespread job loses in the Industry.

Travel Agent, Sadhana Travel Services Ashutosh says, “Terrible times, I am forced to layoff employees who have been working for me for the past 10 years. Its like family and I am helpless.

The airline industry that has been bleeding so far has reacted cautiously to the ATF and duty cuts.

Their argument being that the relief will cut down their accumulated losses so passengers might not get the benefit straight away.