Aviation fuel in India attracts the highest levels of taxes in the world. Airlines have been requesting the government to bring the fuel under the new tax regime of GST. The government hasn’t done that yet. It has also imposed upper and lower bands on air fares levied by carriers.
Indian carriers that were beginning to recover from the throes of Covid19 have now been hit by a spate price increases in jet fuel that have forced them to raise prices. The high fares have impacted demand.
“Taxes is always an issue for the airlines whether it is in fuel or in any other possible way,” he said. He gave the example of Thailand which wants to levy tourism tax to increase its revenue,”
“These are all bad ideas that retard the recovery on avsition and tourism Any measures that increases costs and depress airlines’ ability to increase revenue are bad for the economics of aviation,” he said.
He said the impact will be seen more in the upcoming lean months of July to September.
Fuel prices touched record highs at several points of time this year. State run oil refiners in May increased fuel prices by 16% making them touch new records.
Kannan also said the airline would like the government to remove upper and lower bands on air fares. He added that fares have increased on the international routes too.
The journalist is in Doha to attend the annual general meeting of the International Air Transport Association on the invitation of IATA.