Article Posted on : - Sep 30, 2008

Minister of Civil Aviation Praful Patel addressing a press conference at the civilian air show 'India Aviation 2008', to be held in Hyderabad from 15-18 October, 2008, in New Delhi on Monday. PTI Photo by Kamal Singh

NEW DELHI (PTI): Taking a dig at the "other arms" of his own government Civil Aviation Minister Praful Patel today said his Ministry's repeated pleas for cutting taxes on jet fuel had not yielded any result as the problems of the aviation industry were not being understood by them.

"It is unfortunate that other arms of the government are not understanding the problems of the airline industry... Unfortunately, there are some people in the government who do not understand that civil aviation is as important as any other infrastructure or mode of transport," he told reporters here.

Replying to questions on high taxation of aviation turbine fuel (ATF), Patel said the price of fuel at USD 145 per barrel had created "panic" in the aviation industry, but fortunately there is a downward movement in the prices now.

His comments came close on the heels of a warning by the International Air Transport Association (IATA), the global umbrella body of airlines that some Indian carriers could go bust if structural changes were not made immediately.

IATA chief Giovanni Bisignani had told PTI that India was "among the most expensive places on the planet to buy aviation turbine fuel from" due to high taxes.

Asked whether the airlines would now reduce fares or surcharges, Patel said the industry was yet to recover their losses. However, he asserted that the government did not interfere in the pricing of the airlines which was determined by market dynamics.

"It is not that they are making money" due to a five dollar reduction in the ATF prices, the Minister said, adding that while the airlines should cut their fuel costs, the government should consider allowing them to import ATF.

The Federation of Indian Airlines, comprising major carriers like Air India, Jet Airways and Kingfisher, has recently sought permission from the government to import ATF so that they could save on the high taxes by paying only a flat 4 per cent customs duty. To a question on the slowdown being faced by the aviation industry, Patel said it was a temporary phenomenon as there was "tremendous growth potential" in the Indian aviation market.

Patel said the high-level Committee headed by the Cabinet Secretary K M Chandrasekhar had agreed that there was an urgent need to take certain "corrective measures" and review the jet fuel pricing policy.

The Committee, set up at the direction of Prime Minister Manmohan Singh, was likely to meet in the coming weeks for the second time to give a final shape to their recommendations to help the industry face the crisis.

Earlier, Patel said the first-ever civilian air show in India would be held at Hyderabad next month where a wide range of passenger aircraft, including the largest Airbus A-380, would be on display.

The 'India Aviation 2008' international exhibition and conference, to be held from October 15-18, would have the US as the partner country. Almost all major aircraft and engine manufacturers and other suppliers, besides all leading Indian airlines, would participate.