Airlines seek cut on jet fuel taxes as losses mount

Warns the government that increasing pressures could lead to closure of one or more airlines

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India’s private airlines have asked the government to cut taxes on jet fuel and force state-controlled Air India Ltd to raise fares, as losses mounted at private carriers that control at least 83% of the local passenger market. The airline firms have lost Rs. 3,500 crore in the six months ended September, more than the Rs. 2,900 crore they had lost in the last fiscal, according to an airline lobby group.

Top airline officials led by Jet Airways (India) Ltd’s chairman Naresh Goyal, Kingfisher Airlines Ltd’s chief executive Sanjay Aggarwal, IndiGo’s president Aditya Ghosh, SpiceJet Ltd’s chief executive Neil Mills and GoAir chief executive Giorgio De Roni met aviation minister Vayalar Ravi on the weekend to apprise him of current problems and seek state intervention as per a report by tarun Shukla in Mint.

These private carriers have logged a combined daily loss of Rs. 20 crore in the first six months of the year to 31 March and warned the government that further pressure could lead to closure of one or more airlines.

“It is feared that the results for the first six months will show a loss of Rs.3,500 crore,” said Anil Baijal, secretary general of the lobby group Federation of Indian Airlines (FIA), who also attended the meeting. “This way the airlines may not be able to function—one or two may go down,” he said. “We feel it will be a serious matter for the economic climate if one or two go down.”

While the first quarter earnings of the three listed carriers—Jet, Kingfisher and SpiceJet—have been announced, second quarter results are awaited. All three carriers posted losses in the first quarter.

FIA member airlines had met in the Capital on Friday to formulate a strategy for the crisis, before meeting the minister on Saturday. This was the first formal meeting between the aviation minister and the airlines since the former took over in January from Praful Patel.

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