States should reduce aviation fuel surcharge: Vayalar Ravi

B D Narayankar

Press Trust of India

Bangalore, 19 Sep: Civil aviation minister Mr Vayalar Ravi today urged state governments to reduce surcharge on aviation fuel, saying airlines are facing problems due to this.

“All state governments should reduce aviation fuel sales tax...It is a burden on airline companies,” he told reporters on sidelines of the “Regional Celebration of Civil Aviation Centenary” here.

He suggested states follow Kerala which has reduced aviation fuel surcharge. “It has decided not to impose surcharge up to a certain point, which has benefited airlines,” he said. Mr Ravi rued that states were not reducing surcharge even as no fresh surcharge has been imposed on aviation fuel, which would offset hike in oil prices.

He noted that crude oil bill was hampering economic growth. “The hike in crude prices has affected developing nations like India... This has led to import bills inflate over the top,” he said.

On reviving cash-strapped Air India, he said government would decide how much additional funds could be infused into the national carrier.

“The government will try to infuse fresh funds. It has already given more than Rs 2,000 crore... group of ministers are going to meet and discuss the issue,” he said. Mr Ravi hoped AI's position would change in the next six months, as he was getting cooperation from employees.

“I believe that within six months, I can come to a position, probably not a profitable position, but where the airline can stand on its feet,” he said. On other steps taken to resurrect AI, Mr Ravi said Prime Minister Mr Manmohan Singh has approved appointment of four external directors for finance, marketing, commercial operation and acquisitions.

However, it was for AI management to look for finance from banks and other financial institutions, rather than depend solely on the government for its survival, he said. “Air India will have to look for borrowings. Any business will have to go to the banks to get the funding. This is simple economics,” he said.

On the fiscal health of private airlines, Mr Ravi said the government could help them increase their equity base, but could not intervene in their functioning as there was no provision to do so.

The government, he said, had not taken any decision on allowing foreign aviation majors to invest in private domestic carriers. The minister also stressed the need to enhance the number of air ambulances in the country.

“We need more air ambulances whose numbers are very limited now. I request HAL to produce more ambulance helicopters to help people. There is a need for air ambulance fleets to be made available in every state,” he said.

Links

http://articles.economictimes.indiatimes.com/2011-09-19/news/30175955_1_aviation-fuel-surcharge-state-govts

http://www.moneycontrol.com/news/business/state-govts-should-reduce-surchargeaviation-fuel-ravi_587818.html

http://www.thestatesman.net/index.php?option=com_content&view=article&id=383818&catid=36&show=archive&year=2011&month=9&day=20&Itemid=66

http://ibnlive.in.com/generalnewsfeed/news/state-govts-should-reduce-surcharge-on-aviation-fuel-ravi/828593.html

http://news.outlookindia.com/item.aspx?735384

http://www.indianexpress.com/news/Briefly-Business/849019/

http://www.orissatv.com/NewsDetail.asp?newsId=NS47258