16-Mar-2012 11:38 AM

Indian airlines need to review fare structure, should be asked to prepared turnaround plans: Gvt

Government of India, in the Economic Survey 2011-2012, stated (15-Mar-2012) a working group, constituted on 12-Dec-2011 in order to address issues concerning viability of the civil aviation sector, recommended that state governments rationalise the value added tax (VAT) on aviation turbine fuel (ATF), foreign airlines be permitted to invest in domestic airlines undertakings, and direct import of ATF by airlines for their own consumption be allowed. The working group also decided airlines should be asked to prepare their turnaround plans, which would be examined by the concerned departments of the government separately for each airline. Another recommendation was that fare structures should be reviewed by airlines so as to cover the cost of their operations. The Working Group also decided that an economic regulatory framework may be formulated with regard to excessive/predatory pricing by 31-May-2012. The aviation sector is facing current financial pressures despite air traffic in India continuing to register significantly higher rates of growth averaging 18.5% in the last seven years. [more - original PR]

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