Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT :: articles on VAT and GST in India :: empanelment :: TDS :: due date for vat payment :: VAT Audit :: Central Excise rule to resale the machines to a new company :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARDS :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4% :: form 3cd :: VAT RATES :: ACCOUNTING STANDARD
Sales Tax »
 Amendment to Additional Sales Tax Act unconstitutional: High Court
 Maharashtra will soon achieve Rs one lakh cr sales tax : CM Devendra Fadnavis
 CBEC chief bats for minimal exemptions for India Inc under GST
 Issuance of Free Sale & Commerce Certificate to Merchant Exporters
 Why model GST law does not give confidence to exporting community
 State governments tighten their grip on sales tax holidays
 Income tax dept charts plan to broaden national taxpayer base
 Sale of shares on which STT is payable is exempt from tax
  Sale of Government of India Treasury Bills by Auction
 New tax treatment of sale of unlisted shares brings more certainty, less litigation
 Simpler tax laws, low rate can help get more people to pay up

Airlines may cut more flights to fight ATF costs
June, 16th 2008

The airline industry said it would consider deeper cuts in flights and routes to counter rising aviation turbine fuel (ATF) costs and falling passenger growth as a result of rising fares.

This is one of the key decisions taken at a five-hour meeting among airline chiefs Friday, including Kingfisher's Vijay Mallya, Jet Airways' Naresh Goyal, GoAir's Jeh Wadia and SpiceJet CEO Siddhanta Sharma under the umbrella of the Federation of Indian Airlines (FIA).

Meanwhile, the civil aviation ministry has agreed to request state governments to reduce sales tax when the empowered committee of state finance ministers meets on Monday in New Delhi.

State sales tax ranges from 4 per cent to 35 per cent and makes ATF in India one of the most expensive in the world it accounts for almost half an airline's operational costs in India against a global average of 20 to 25 per cent.

The government's decision to raise ATF prices over 18 per cent last month has forced some airlines to raise fares around 10 per cent, signalling an end to the cheap fare era and rapid growth in passenger traffic.

Low-cost carriers have been holding the price line, but this could severely dent their profits. Most airlines are already reporting losses and the industry is expected to lose $2 billion by the end of this financial year owing to aggressive pricing.

"If for some reason the government is not able to accede to our demands then we have no other option but to cut flights drastically and the connectivity will suffer," said Kingfisher promoter Vijay Mallya, who chairs the FIA.

Airlines have already started cutting back. GoAir, for instance, has opted out of flying to Jaipur and plans to cut shorter-haul flights from Bangalore and Hyderabad and opt for more long-haul flights. Company executives were not available for comment.

By September Jet Airways is moving out of numerous routes that will be serviced by its value airline JetLite, formerly Sahara Airlines, which it acquired last year. These include routes like the entire north-east and Jammu & Kashmir sectors and destinations like Port Blair.

"We have started by taking over low-cost sectors like Chennai-Pune and Chennai-Port Blair, among others," said Rajiv Gupta, COO of JetLite.

Meanwhile, JetLite also stopped operating flights in sectors like Delhi-Chandigarh, Ahmedabad-Jaipur, Mumbai-Bhuj and Hyderabad-Bangalore and will cut ten more in the next month.

The aim is to reduce the number of flights between Jet and JetLite by 20 per cent, sources in the airlines said.

Rival carrier Kingfisher has also decided to cut domestic capacity 15 to 16 per cent, said Rajesh Verma, executive vice-president, Kingfisher Airlines.

Senior executives in the company added that like Jet, Kingfisher would also rationalise routes with Simplifly Deccan, which it bought late last year.

"We are becoming one company in a week, so we will definitely look at synergising routes," said a senior company executive.

SpiceJet, which saw average load factors drop 7 to 8 per cent over last year, will cut daily flights from 117 to 100 by next month. SpiceJet's Sharma said this would increase average load factor 2 to 3 per cent and yields per passenger by Rs 70.

Airlines are also urging the ministry to negotiate with the private operators to reduce the parking and the landing charges levied at the new airports and allow the airlines to do their own ground-handling instead of using agencies appointed by the airport operators.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Custom Software Development Outsourcing Custom Software Development Offshore Cus

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions