Air turbine fuel (ATF) accounts for 45% of air ticket prices, Minister of Civil Aviation Ram Mohan Naida said Lok Sabha on Thursday, March 27, 2025, and noted that some states, including Tamil Nadu, charge for them | PHOTO CREDIT: SIVAKUMAR PV
Air turbine fuel (ATF) accounts for 45% of airfare prices, Minister of Civil Aviation Ram Mohan Naida said Lok Sabha on Thursday (March 27, 2025), noting that some states, including Tamil Nadu, also charge a 29% value added (data).
“There are some countries that charge up to 29% of VAT to ATF, and Tamil Nadu is one of the states that has the highest ATF in the country,” the minister said. While 15 countries have reduced VAT per ATF below 5%, others still store higher rates, which affects operations of airlines and passenger tariffs, he added.
Mr. Naida said that the General Directorate for Civil Aviation (DGCA) monitors the prices of air dishes and requires air companies to regularly present a tariff sheet. Previously, airlines were obliged to submit a tariff sheet at the beginning of the summer and winter seasons and were supposed to change their tariffs, but are now obliged to present a tariff sheet every month and cannot improve it.
His notes in parliament come at a time when DGCA is exploring summary data on air years in the last two years submitted by airlines, after complaints about a sharp increase in ticket prices for prayer during Kumbh Mel.
“Multiple aircraft will reduce fare”
In response to the question of DMK A. Raja, why the government did not make efforts to put more competition in this industry – the US reference to Duopol in Aviation, where Indigo and Air India represent 91% of domestic air passengers – the Minister said that more competition will help reduce aircraft.
In 2014, there were 340 aircraft, which have now grown to 840 aircraft, Mr. Naida said. Airlines also have orders for 1700 additional aircraft due to massive demand for travel, he said, stressing that 10% of the annual growth rate in India was the highest in the world.
In order to help airlines to bring more aircraft to the country, the government promotes leasing through the Gujarat gift city instead of overseas, said Mr. Naida, noting that 200 aircraft have been rented so far.
The Minister said that the government also submitted a bill on ratification of Capetown Convention and Protocol to resolve disputes between airlines and landlords over aircraft, engines and other parts. This will further reduce leasing costs for airlines by 8% to 10%, while the benefits of these different steps are running down in terms of lower tickets in terms of lower tickets.
Published – 27. March 2025 20:49 IS IS
