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Rediff.com  » Business » Airlines need to discuss high taxes on ATF with govt: AirAsia

Airlines need to discuss high taxes on ATF with govt: AirAsia

August 26, 2014 17:35 IST

Stating that higher taxes on aviation turbine fuel should be brought down to boost the country's aviation sector, no-frill carrier AirAsia India today asked all airlines to have a discussion with the government on this issue.

"All airlines need to have strong discussion with the government together. We are doing a bit and we constantly have discussion on (with the government) on how tax on fuel needs to be waived or dropped down," AirAsia India CEO Mittu Chandilya told reporters.

He said from the discussions he is hopeful that "there will be a relooking at it".

AirAsia India on Tuesday announced commencement of its direct flight to Chandigarh from Bangalore from September 5.

He said that airlines in India is not a "profitable business", saying that the government support is required for aviation sector to grow.

"Airlines in India is not a profitable business at the moment. I think you can run a profitable aviation business with the support you need. You (government) give some break on taxes and the aviation industry can work in India," he asserted.

The 34-year old AirAsia India CEO said aviation is not a luxury product, saying everybody should have an access to flights as it helps in imporving lifestyle and productivity.

"In India with a population of 1.2-1.3 billion, only 100 million fly and this is funny and an embarrassment. It needs to be much higher. And out of 100 million, 50 (million) of that (travellers) go to Mumbai and Delhi," he said.

AirAsia, which is a joint venture between Tata Sons Ltd, TelestraTradeplace currently flies from Bengaluru to Chennai, Kochi, Goa and vice versa.

On launching flights on international routes, Chandilya said the company would look at it provided the 5/20 rule (five year with 20 aircrafts) is relaxed.

"There is a restriction on us being able to fly internationally but as an Indian carrier, you have rule called 5/20 without which you cannot fly out. We are an Indian venture if that rule changes and hopefully it changes, we will be looking to fly internationally," he said.

He further said that the company would also look at expanding its operations in five more cities, including in the North-East in future.

However, he refused to share any detail about the new destinations.

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