Patel to meet PM, FM on ATF

New Delhi, June 2 (UNI) Concerned over the impact of rising jet fuel prices on the financial health of airlines, Civil Aviation Minister Praful Patel today said he would soon meet Prime Minister Manmohan Singh and Finance Minister P Chidambaram to find ways to ease pressure on the carriers.

''We are extremely unhappy over the ATF price rise and we are taking a serious note of it,'' Mr Patel told reporters here.

State-run oil marketing companies have raised the Air Turbine Fuel (ATF) prices by 18.6 per cent, effective from June 1.

''With ATF accounting for 45 per cent of airlines' operating costs, the impact of rising fuel prices is going to hurt the aviation sector in a large way,'' he said.

The Minister said some airlines had informally conveyed to him their inability to pass on the burden entirely to the passengers and were even contemplating either pruning or rationalising their services.

''These are serious issues the airline industry is facing...,'' he added.

Mr Patel said he would soon meet the Prime Minister and the Finance Minister on the ATF issue.

One option could be to bring ATF under the 'declared goods' category attracting only 4 per cent sales tax, which at present is as high as 30 per cent in some states.

The issue of relaxing rules for the domestic carriers to fly abroad could also be taken up, Mr Patel said.

Currently, domestic carriers with 5 years of experience and a fleet of 20 aircraft are allowed to fly abroad. Private carriers are demanding that the time frame be reduced to three years.

UNI YJ SR BST1852