BY | March 26, 2013

New Delhi, (IANS) In a bid to provide cheap aviation fuel to domestic airlines, the Airports Authority of India (AAI) Tuesday said it will form a joint venture (JV) with airlines, state-run oil marketing companies and Reliance Industries.

According to AAI chairman V.P. Agrawal, the new JV company will provide a fuel cost saving of up to 10 percent.

“AAI will hold about 13 percent in the JV, with other stake being held by different partner,” Agrawal told reporters here on the sidelines of an industry event.

However, he did not divulge any details of the airline partners or when the JV would become operational.

In India, domestic airlines’ pay anywhere from three to 34 percent of state sales tax on aviation turbine fuel.

At present, aviation fuel in India is nearly 50-60 percent dearer than in Thailand, Singapore or the UAE due to the additional sales tax imposed by states. This pushes up the cost of operations by close to 30 percent.

In February 2012, the government notified direct import of jet fuel and called upon interested carriers to apply for licences.

The development came after a group of ministers headed by the then Finance Minister Pranab Mukherjee rolled out a plan to help domestic carriers, allowing them to directly import aviation fuel.

The move was envisaged to help airlines’ cut operating costs by 10-15 percent, saving on sales tax.

However, due to several logistical and financial difficulties, none of the airlines’ was able to directly import jet fuel.

The fuel component constitutes about 50 percent of the total operating cost of airlines in India.

RELATED

Flipkart, Amazon war starts in India, Future Group joins Amazon, the rising star on the Indian ecommerce scene One of the biggest brick and mortar retailer in India Future Group has announced that it was signing going to collaborate with one of India’s top ecommerce...

Mukesh Ambani's twin kids made directors in Reliance companies. It is yet to be seen when other Ambani will bring his kids too. Mumbai, Oct 11 (IANS) Reliance Industries chairman Mukesh Ambani and director Nita Ambani's twin children Isha and Akash are set to join two of the...

AVN_AMBANI_118651f

Flipkart, Snapdeal sell Rs 600-cr merchandise in a single day. Both companies prove that they are second to none. In the meantime Amazon is yet to reveal its numbers. But it may not have notched such a high sale target. Bangalore, Oct 6 (IANS) India's largest e-retailer...

Flipkart's Big Billion Day sale is no BlackFriday 2014. Instead people are saying that it is more of promise than anything substantial. Another thing that is also getting people’s attention is the fact that the company has actually failed to give the sort of discounts that...

flipkart_big_billion

New Delhi, Sep 23 (IANS) State-owned Syndicate Bank Tuesday terminated the services of its suspended chairman and managing director Sudhir Kumar Jain with immediate effect, a day after a court here extended his police custody till Tuesday "Syndicate Bank has informed the...