Click to play videoNew Delhi: Prime Minister Manmohan Singh has called a meeting of the chiefs of domestic airlines on Saturday with a focus on the financial health of the aviation sector.
Kingfisher's Vijay Mallya, Jet Airways' Naresh Goyal and Rahul Bhatia of Indigo Airlines are expected to attend the meet.
This comes in the wake of the financial crisis at Kingfisher Airlines. The government has so far said that no proposal to allow FDI in Aviation is being considered for now.
This time of meeting happened before also. In 2009, all the airlines chiefs went to meet the PM. This meeting was called by the aviation minister.
The chief demands at this point would be to lower the sales tax on aviation, which is very high in India. Now, it is anywhere between 22-33 per cent.
Because of that the aviation turbine fuel becomes very expensive.
In other countries, the aviation turbine fuel costs to about 20 per cent of its overall operating cost. In India, it goes up to 40 per cent.
This time the most important issue is allowing foreign airlines to invest. 49 per cent FDI is already allowed.
Now will the government allow foreign airlines to invest? That will be key decision.
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