Patel to meet PM to discuss aviation fuel price hike

June 2nd, 2008 - 9:07 pm ICT by IANS  

A file-photo of Manmohan Singh

New Delhi, June 2 (IANS) Civil Aviation Minister Praful Patel Monday expressed concern over the hike in air fares in India and said he would discuss the issue of high state levies on aviation fuel with Prime Minister Manmohan Singh. “Some airlines have informally told me that they were planning to either prune or rationalise their services,” Patel told a press conference here, two days after state-run oil companies hiked aviation fuel prices.

“I will meet the prime minister and convey the concerns of the industry,” he said after several carriers responded to the hike in aviation fuel prices with an increase in fares to neutralise its impact on operational costs.

“The base price of ATF (aviation turbine fuel) is already very high,” he said as state-run oil companies Saturday hiked prices by 18.5 percent, making the fuel cost Rs.69,227 per kilolitre in Delhi against Rs.58,387.92 earlier.

The fuel now costs Rs.76,625.68 per kilolitre in Mumbai, against Rs.64,824 prior to the hike.

“We have seen robust growth (in Indian airline industry) in the last three years but the growth has drastically been affected in the last few months. We need to give relief to the aviation sector,” Patel said.

According to industry officials, aviation fuel accounts for around 45 percent of the operating cost of an airline in India.

Patel also said the situation in India was not unique. “It’s a global phenomenon owing to which many airlines in the US, Europe and other countries have either shut down or pruned their operations,” he said.

But the minister assured that the guidelines of the Directorate General of Civil Aviation, the regulator for the industry, will ensure that connectivity in India will not get affected due to route rationalisation by airlines.

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