NEW DELHI: Jet Airways Chairman Naresh Goyal on Monday met Finance Minister P. Chidambaram and sought tax concessions on aviation turbine fuel (ATF) to tide over the financial crisis and the downturn that the civil aviation sector was facing.
Mr. Goyal, who heads the country’s largest private carrier, drew attention of the Finance Minister to a number of problems the carriers in the country were facing.
According to informed sources, the Jet chief is understood to have asked Mr. Chidambaram to consider the demand of airlines to rationalise taxation and levies on ATF, which has become one of the biggest issues that has burdened the carriers in India.
Jet fuel makes up for nearly 40 to 45 per cent of the total operational cost of a carrier.
Mr. Goyal’s meeting with Mr. Chidambaram came within days of his airline deciding to reinstate 800 employees, who were given termination letters citing mounting losses.
Jet alone had a total outstanding fuel bill of Rs. 859 crore — of which it had defaulted on payment of bills which were due on September 25 and October 5 this year.
Similarly, Kingfisher Airlines, promoted by Vijay Mallya of the U.B. group, owed Rs. 110 crore to Indian Oil, of which Rs. 60 crore remained unpaid after the expiry of the credit period. Jet and Kingfisher recently announced their alliance to forge synergies in operations to cut costs and make both the rivals profitable.
National Aviation Company of India Ltd, the holding company of Air India, has an outstanding of Rs. 606 crore as on October 8 and has a monthly fuel bill running up to Rs. 337 crore.
Mr. Mallya also indicated that if the slump in the market continued, more job cuts and lay-offs might take place in the aviation industry.