More steps likely to bail out aviation industry

After scrapping customs duty on jet fuel and reducing its price, government is contemplating taking some more measures to help the fledgling Indian aviation sector become viable once more.     

"We expect more steps in this direction. The dialogue is going on ... Some more steps may be taken," sources in the Civil Aviation Ministry said here.     

However, sources did not specify what steps could be taken.  Issues raised by the industry, like rationalisation of the eight per cent central excise on jet fuel, still remain to be addressed.     

As a result of the government abolishing five per cent customs duty on aviation turbine fuel (ATF) from today, state- run oil firms have cut jet fuel prices by Rs 2,100 per kilo litre, on top of the 17 % price reduction announced late last week.     

Asked how long would it take for the industry to pass on the benefits of these cuts to the passengers, they said the airlines would have to ensure good pricing to win back those flyers who had earlier left train travel but has now returned to it.     

They also wanted the industry to come out of the red. Their comments come in the wake of the International Air Transport Association (IATA) asking the government to reduce a variety of taxes and charges, some of which, it said, violated international obligations to help the Indian airline industry.     

Warning that the global crisis in aviation was "deepening", IATA Director General and CEO Giovanni Bisignani said India was "one of the epicenters with potential losses of $ 1.5 bn this year .... the most urgent (measure) is to address taxation, which is crippling the industry."