Airlines need to review fare structure

NEW DELHI, MARCH 15: 

Airlines need to review their fare structure so as to cover the cost of operations, the Economic Survey 2011-12 tabled in Parliament on Thursday states.

The Survey adds that the Working Group headed by the Secretary Civil Aviation, which made the recommendation on need to review airfare structure, also decided that an economic regulatory framework may be formulated with regard to excessive fares/pricing by May 31 this year.

The Group also recommended that State Governments rationalise value-added tax on aviation turbine fuel, foreign airlines be permitted to invest in domestic airlines and direct import of ATF by airlines for their own consumption be allowed.

"The Working Group has also decided that airlines should be asked to prepare their turnaround plans, which would be examined by the concerned departments of Government separately for each airline," the Survey states.

It adds that air traffic continues to register significantly higher rates of growth averaging 18.5 per cent in the last seven years.

"Domestic passenger traffic handled at Indian airports reached 108.1 million during January-November 2011 from 90.5 million in the corresponding period in the previous year registering a growth of 19.4 per cent. Domestic cargo throughput during January-November 2011 stood at 0.75 MMT, the same level as the previous year," the Survey said.

The Government also gave 'in-principle' approval for setting up of greenfield airports at Karaikal in Puducherry and Shirdi in Maharashtra.

SOURCE