SpiceJet applies for direct import of jet fuel

April 3rd, 2012 - 1:23 am ICT by IANS  

Pranab Mukherjee New Delhi, April 2 (IANS) Budget carrier SpiceJet Monday said it has applied to the Director General of Foreign Trade (DGFT) for permitting the airline to directly import jet fuel.

On Feb 22, the government had notified direct import of jet fuel and called upon interested carriers to apply for licences.

The development came after the Feb 7 decision by a group of ministers (GoM) headed by Finance Minister Pranab Mukherjee to roll out a plan to help domestic carriers, allowing them to directly import aviation fuel.

The move will enable airlines to cut operating costs by 10-15 percent, saving on sales tax, which ranges between three percent and 35 percent and is levied by state governments.

Jet fuel now constitutes about 50 percent of the total operating cost of airlines in India. Domestic airlines are estimated to have lost around Rs.3,000 crore in the first six months of last fiscal.

“The recent government announcement is an interesting proposal and we hope that direct import of aviation fuel will considerably bring down our operational cost,” said Neil Mills, chief executive, SpiceJet.

“After discussing the proposal in detail, we decided to go ahead with importing of aviation fuel from overseas market,” he said in a statement.

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