Praful to meet PM over aviation fuel hike

June 10th, 2008 - 10:42 pm ICT by IANS  

A file-photo of Manmohan Singh

New Delhi, June 10 (IANS) Civil Aviation Minister Praful Patel will meet Prime Minister Manmohan Singh Wednesday to discuss rising aviation fuel prices that have left the airline industry shaken. According to sources, representatives of the airline industry are also expected to join Patel when he meets the prime minister. The meeting was earlier slated for Tuesday, but was cancelled due to the prime minister’s busy schedule.

A day before Patel meets Singh, he told news channels that both consumers and airlines were bleeding owing to steep rise in the aviation fuel charges.

“The airlines cannot afford to make losses for long,” he said, but also expressed confidence that the prime minister would take a positive view to their demand for cut in taxes on aviation fuel.

His meeting with Singh also assumes significance in the wake of the resentment among air operators who have threatened to prune their services.

Fearing a crisis situation in the aviation industry, Patel will make a presentation to the prime minister and Finance Minister P. Chidambaram about the difficulties being faced by the aviation industry.

Representatives of various airlines recently met senior aviation ministry officials and told them they could not continue to sustain operational losses for long owing to high aviation fuel prices, sources said.

The airline industry is concerned over the impact of the fuel hike and its repercussions on the financial health of its carriers.

Patel expressed concern over the health of the aviation industry, soon after the government-run oil companies May 31 hiked the prices of aviation fuel by 18.5 percent.

The hike pushed fuel costs to Rs.69,227 per kilolitre in Delhi against Rs.58,387.92 earlier and Rs.76,625.68 per kilolitre in Mumbai against Rs.64,824.

The airlines responded by increasing the fuel surcharge, making air travel costly.

The meeting also comes in the backdrop of several airlines contemplating to prune their air services besides delaying their fleet induction plans or even grounding some of their aircraft, an aviation ministry official said.

Some airlines have informally told Patel that they could prune or rationalise their air services as they were unable to sustain the high cost of aviation fuel.

Tags: , , , , , , , , , , , , , , , , , , ,

Posted in Business |