The aviation sector in the country is under immense stress due to rising operational costs amid the ongoing West Asia crisis.
A Sichuan Airlines plane lands at Ben Gurion international airport near Tel Aviv, Israel (File Photo: IANS)
After Maharashtra, the Delhi government has also reduced Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) from 25 per cent to 7 per cent, a move that will grant a huge sigh of relief to airlines.
The aviation sector in the country is under immense stress due to rising operational costs amid the ongoing West Asia crisis.
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The cost of ATF has seen a sharp increase due to the global energy crisis, courtesy of the US-Iran war in West Asia, which has disrupted the supply through the key Strait of Hormuz route.
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Earlier on Friday, the Maharashtra government reduced the Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) from 18 per cent to 7 per cent, Union Civil Aviation Minister Kinjarapu Ram Mohan Naidu said in a post on X.
Naidu thanked Maharashtra Chief Minister Devendra Fadnavis for the “timely intervention,” noting that the decision would help keep airfares in check at a time when global challenges are pushing costs upwards.
“Maharashtra State has 16 operational airports and the highest annual air traffic amongst the states, of around 75 million passengers, with daily passengers of around 2 lakhs. This reduction in VAT will help the flight operations in all these airports and benefit the large number of passengers,” he said.
ATF typically accounts for 30-40 per cent of an airline’s operating costs, making it one of the largest expense heads for carriers. With crude oil prices volatile due to geopolitical risks, airlines have faced pressure on margins and fare structures.
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