The cash strapped airline sector has finally given into pressure from high crude oil prices and unsupportive taxation norms. The industry will soon pass off the cost burden to passengers.
The sector has long since asked the government to reduce the taxes levied on air turbine fuel (ATF), the current taxes levied is a painful 33% in some states. he Federation of Indian Airlines - the domestic carriers had reiterated their demand for reduction of taxes ATF by designating it as 'declared good' to attract a uniform 4% tax rate across the country. The Finance Minister however, failed to meet any of these demands.
Soaring oil prices have been a major concern world over since October last year. The current Japan quake has taken crude prices to an astronomical$ 110 per barrel.
Kingfisher, yesterday announced that it raised the fuel surcharge, while low cost airline SpiceJet said that it would raise airfares further in order to combat high fuel prices.
SpiceJet plans to hike prices by Rs 600-700 to break even. "We have raised fares by a couple of hundred rupees and we are reviewing it on a daily basis," CEO, Neil Raymond Mills told reporters.
So, you may just have to stay home or drive to your nearest hill station these holidays,
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