Aviation minister says has asked states to cut jet fuel tax

NEW DELHI Tue Jun 24, 2014 4:14pm IST

A passenger aircraft is silhouetted against the rising moon in New Delhi May 7, 2009. REUTERS/B Mathur/Files

A passenger aircraft is silhouetted against the rising moon in New Delhi May 7, 2009.

Credit: Reuters/B Mathur/Files

Related Topics

Stocks

   

NEW DELHI (Reuters) - Civil Aviation Minister Ashok Gajapathi Raju said on Tuesday he had asked states to cut jet fuel tax, which the country's struggling airlines say makes it difficult for them to stay profitable.

Raju said he believed aviation turbine fuel (ATF) was "taxed on the higher side" and that states should "bring down" the tax, without indicating what he considered an appropriate level.

High taxes - many of them set by individual states rather than central government - low fares and a highly competitive market mean all but one of India's big airlines are losing cash. Fuel costs are among the highest in the region.

Shares in listed Indian airlines jumped after Raju's comments, with SpiceJet Ltd (SPJT.BO) closing up 10.03 percent and Jet Airways Ltd (JET.NS) up 6.55 percent in a market where the Nifty finished the day up 1.16 percent.

Raju was speaking at a news conference following the announcement that state-owned Air India had joined the Star Alliance group of carriers. Raju said the ministry expects the Star Alliance membership to boost Air India's revenues by around 5 percent.

(Reporting by Tommy Wilkes; editing by Anand Basu and Jason Neely)

FILED UNDER:

Economic Pulse

REUTERS SHOWCASE

Nifty Above 8,600

Nifty Above 8,600

Nifty hits record high above 8,600; state-run lenders gain  Full Article 

Indian in Iraq

Indian in Iraq

India says no contact with 39 men held by Islamic State in Iraq.  Full Article 

Sahara Issue

Sahara Issue

Sahara looks to raise $650 million loan to fund bail.  Full Article 

Bhopal Tragedy

Bhopal Tragedy

Bhopal's toxic legacy lives on, 30 years after industrial disaster.  Full Article 

Essar Group

Essar Group

Exclusive - Essar's planned oil-for-steel deal tests Iran sanctions  Full Article 

Islamic Fund

Islamic Fund

India gets new Islamic equity fund but debt market still off-limits  Full Article 

Fiscal Deficit

Fiscal Deficit

April-October fiscal deficit nears 90 pct of full-year target  Full Article 

Oil Prices

Oil Prices

Oil hits new four-year low post OPEC as glut looms  Full Article 

Gold Imports

Gold Imports

India eases gold import rule in surprise move.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage