"Indian airports may cut landing, parking charges"

Wednesday, June 25, 2008

Government may cut landing, parking charges at airports
India - The Economic Times


NEW DELHI - In a bid to bail out the aviation industry for losses it is
incurring on account of high operational costs, Civil Aviation Minister
Praful Patel Tuesday hinted at lowering landing and parking charges for
aircraft. 

"This would be a form of relief for the loss-making aviation industry,"
Patel said at a function here, and added his ministry would discuss the
issue with the Airports Authority of India (AAI) soon. 

"As of now, we have not initiated any talks on this issue with airport
authorities. But we are going to look into this issue," Patel said. 

He, however, ruled out any bailout package from the government to the
aviation industry. 

The minister said aviation fuel contributed 50 to 60 percent of operational
cost of an airline, but states did not understand that. 

"States cannot treat revenues from sales tax on aviation fuel as cash cows
because it could be a very short-term vision. If the air connectivity within
states is affected due to high sales tax, it will jeopardize the economy,"
he asserted. 

The meeting of the Empowered Committee of State Finance Ministers on ATF
prices, which was to have been held June 23 in Srinagar, Jammu and Kashmir,
has been deferred. 

Of the Rs.80 billion ($2 billion) losses predicted for the airlines, almost
Rs.40-50 billion is on account of ATF price hike, including base price and
taxes levied. 

Patel said the airlines industry, in a bid to be more competitive, has
raised ticket prices. "The industry is now trying to be more self-regulatory
and more responsible. We can see better pricing," he added. 

Regarding greenfield airport policy, Patel said private players rather than
state governments would likely contribute to infrastructure development.

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