Fuel tax framework hits airlines hard: International Air Transport Association

CHENNAI: As fuel prices are skyrocketing, India’s regulatory and tax framework around fuel has hit hard the airlines serving the Indian market, according to Alexandre de Juniac, International Air Transport Association’s (IATA) Director General and Chief Executive Officer.

“To start, there is no real competition for fuel suppliers at airports, so there is little commercial incentive to keep fuel prices competitive. Then the airport takes fuel throughput fees. And, adding insult to injury, the GST is then applied to the throughput fee, the infrastructure fee and the intro-plane service fee. Then, on domestic flights, fuel is subject to excise duties and state taxes go up to 30%,” said de Juniac at the International Aviation Summit in Delhi, co-hosted by the Indian Ministry of Civil Aviation (MoCA), the Airports Authority India (AAI) and the IATA.

“We understand that governments need tax revenue. But the economy needs financially sustainable air connectivity. The lack of competition in fuel and lack of true open access to on-airport fuel infrastructure is strangling the lifeblood from the airlines. If you kill the goose that lays golden eggs, there are no more eggs,” a release quoting him stated.

IATA, in the release, also called on the Union government to maximise the potential contribution of aviation to India’s development by addressing infrastructure constraints.