Patel asks airlines to cut fares

December 16th, 2008 - 5:20 pm ICT by IANS  

New Delhi, Dec 16 (IANS) A day after oil companies slashed aviation fuel prices by 11 percent, Civil Aviation Minister Praful Patel Tuesday urged air operators to pass on the benefit to travellers by lowering fares.Oil companies Monday reduced aviation turbine fuel (ATF) prices for the seventh time since September. Now, ATF is sold at Rs.32,691.28 per kilolitre in Delhi (cut by Rs.4,208.37).

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

“It is imperative that aviation industry reduces fares as fuel prices are down,” said Patel.

“We supported the aviation industry when the ATF prices were high, now when the prices are down the industry should take the cue and reduce prices and thus boost demand,” he said here.

Earlier in the day, Patel asked the state governments to lower local tax on ATF to reduce operating costs of airlines. He told the Rajya Sabha that sales tax varies from four percent to 32 percent that 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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