Civil Aviation Minister Ajit Singh has expressed concern over the economic losses suffered by airlines and asked states to evolve a roadmap for the development of civil aviation sector. He also asked them to reduce VAT on Aviation Turbine Fuel (ATF) to 4 per cent. Addressing the first meeting of the State Civil Aviation Ministers in New Delhi today, Mr Singh said one of the major reasons for the economic losses is the high cost of ATF, which constitute 40 to 50 per cent of the operational cost of all domestic carriers. The Minister said, ATF prices in India are 50 to 60 per cent costlier due to the high base price of ATF topped up by the very high Advalorem VAT imposed by states. Mr Singh stressed the need for developing smaller low-cost and no-frill airports in potentially economically growing cities identified in various partsof the country with the help of state governments. He said there is a need to encourage the airlines to operate fights to provide regional air connectivity to 2-tier and 3-tier cities and connectivity to remote and difficult areas. He said, the civil aviation and tourism sectors directly contribute about 3.58 per cent to GDP and, if indirect benefits are taken into account, its about 5.83 per cent.
Minister of State for Civil Aviation KC Venugopal spoke about the need to develop the General Aviation sector and the helicopter operations.