Chennai-based SpiceJet has become the first airline to apply for direct jet fuel import. It has submitted its application to the Directorate General of Foreign Trade (DGFT).
Mr Neil Mills, SpiceJet's Chief Executive Officer, said, “After discussing the proposal in detail, we decided to go ahead with importing aviation fuel from overseas. We have applied to the DGFT for permission to import aviation fuel in India.”
He said the recent Government announcement was an interesting proposal, and hoped that direct import of aviation fuel would considerably bring down the company's operational cost. Jet fuel constitutes up to 40 per cent of the airline's total operating cost.
The Centre recently allowed airlines to import aviation turbine fuel (ATF) or jet fuel. Airlines will now be able to save State sales tax, which ranges between four and 32 per cent. Airlines have been complaining that the high State tax along with Central duties make the fuel very costly.