Taxes on jet fuel choking airlines: IATA

Taxes on jet fuel in India along with lack of competition for fuel suppliers at airports is “strangling the lifeblood from the airlines,” International Air Transport Association (IATA) Director General and CEO Alexander de Juniac said on Tuesday.

IATA also expressed concerns over the Goods and Services Tax (GST) imposed on international flight tickets. Mr. Juniac said that such a levy “weakens India’s competitiveness by raising the cost of connectivity.”

At present, 5% GST is levied on economy class tickets and 12% on business class tickets for international travel. The recent spurt in fuel prices has led to industry players reiterating the additional burden imposed on Indian players, who also have to pay extra taxes on ATF.

“Fuel accounts for about 24.2% of an airline’s average cost structure. In India, it is 34%, making India’s carriers particularly sensitive in this area. All airlines are already suffering from the rise in fuel prices and India’s regulatory and tax framework around fuel hits airlines serving this market harder,” Mr. Juniac said, addressing the International Aviation Summit.