TravTalk - India

Jet crash lands

-

The beginning of this year has descended a pall of gloom over Indian skies. However, the crashing of Jet Airways comes as no surprise to those who troubles started when its then Chairman, Naresh Goyal, decided to buy Air Sahara in spite of many experts warning him against it. After Jet acquired the loss-making Air Sahara for about ` 1,450 crore in 2007, it was branded as the budget carrier JetLite. Around the same time, India witnessed a surge of offering cheaper tickets. This acquisitio­n made Jet bleed and the airline wrote off its entire investment in 2015. Also, in spite of low-cost carriers making India, Jet continued to focus greatly on corporates. However, this debacle may now help turn the government’s attention towards including aviation turbine fuel (ATF) under the purview of Goods and Services Tax (GST). Today, fuel makes up about 40 per cent of the cost of running an airline in India; little wonder then that airlines struggle to make money even as pace. Currently, ATF prices vary from state to state. In Maharashtr­a and Delhi, it attracts a tax of 25 per powers that be!

Newspapers in English

Newspapers from India