Kingfisher to decide on fare cut this week (Lead)

December 16th, 2008 - 8:28 pm ICT by IANS  

New Delhi, Dec 16 (IANS) Hours after Civil Aviation Minister Praful Patel urged private operators to pass on the benefit of fuel price cuts to travellers, Kingfisher Airlines Tuesday said it would take a decision on this Dec 20.”The airline will take a decision on fare cuts this Saturday,” a Kingfisher spokesperson said.

Oil companies Monday reduced aviation turbine fuel (ATF) prices for the seventh time since September. Now, ATF is sold for Rs.32,691.28 per kilolitre in Delhi, a reduction of Rs.4,208.37).

However, the airlines have not reduced fares, saying they were still undergoing losses.

Earlier Tuesday, Patel said it was “imperative that aviation industry reduces fares as fuel prices are down”.

“We supported the aviation industry when the ATF (aviation turbine fuel) prices were high, now when the prices are down the industry should take the cue and reduce prices and thus boost demand,” he said during question hour in the Rajya Sabha.

Patel also asked the state governments to lower local tax on ATF to reduce operating costs of airlines. The sales tax varies from four percent to 32 percent and this has a cascading affect on fuel price.

“We have asked the states to look at the issue of reducing sales tax,” he said.

The minister also supported the government’s move to ask the public sector oil companies to give grace time to private airlines Jet Airways and Kingfisher Airlines to clear their fuel dues and repay amounts defaulted in instalments.

Patel said the aviation sector should not be considered as “elitist” but as any another transport sector and the government could not ignore its need in a difficult situation.

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