Air fares to come down by New Year: Patel

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New Delhi, Nov 22: Civil Aviation Minister Praful Patel on Saturday, Nov 22 categorically stated that airfares would come down by new year.

''Airfares will definitely come down.... Wait till new year, just one month to go,'' Mr Patel told reporters after addressing the Hindustan Times Leadership Summit. Earlier, sharing the dais with Jet Airways and Kingfisher Airlines heads Naresh Goyal and Vijay Mallya, Mr Patel urged them to lower fares for the benefit of passengers. ''The Government understands your difficulties in terms of high sales tax on fuel, and is trying its best to help you tie over the difficult times. ''But the lowering of jet fuel prices should be reflective in better fares and lower fares for passengers,'' he said.

Mr Patel turned down Mr Goyal's suggestion of having a regulator to check if his airline was wasting money, saying deregulation would remain the hallmark of Government decision-making whether Mr Mallya or Mr Goyal liked it or not.

''You are the byproduct of deregulation, you cannot have a regulator. This is not going to happen,'' he said.

Mr Goyal had stated that it was not possible to lower fares when his airlines was not making profit.

''I would not like to close my company. Vijay (Mallya) can live on liquor,'' he said, jokingly referring to the liquor baron.

''The Government can appoint a regulator. We are open to transparency. You can check if we are wasting money. We will do what you want us to do provided we are making profit,'' the Jet Chairman said.

Mr Patel called upon the two airlines, which control 60 per cent of India's aviation traffic, to look beyond the super luxury model. ''We don't have even five planes to carry cargo. It's a great loss of opportunity,'' he said. ''Low-cost airlines have a market waiting to fly. You have to get the numbers,'' he added.

Mr Goyal said the next two years would be worse than the present.

''But it would be a temporary setback. We will tide over the storm.... We want to go slow. Our first responsibility is to be profitable,'' he said.

Mr Mallya said the biggest problem facing the aviation sector was inordinately high amount of sales tax on jet fuel which was as high as 30 per cent in some States.

He called for giving aviation fuel a declared goods status which would then attract a standard four per cent sales tax.

Mr Patel admitted that a wrong taxation policy was one of the reasons for the Indian aviation sector not growing.

But, he said, the biggest issue was infrastructure bottlenecks such as lack of world-class hub.

''Unless you have world-class hub or hubs, you will not be able to carry international traffic you talk about,'' he said, adding that India would have six hubs by 2010.


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