In an effort to reduce its operating costs, the state-owned Air India plans to start direct import of aviation turbine fuel (ATF).
Official sources told Business Line that the airline has informed the Government of its decision to approach the Director-General of Foreign Trade for permission to directly import aviation fuel.
The airline's monthly fuel bill is in the range of about Rs 500-550 crore and is among the top three major expenses incurred by the carrier. By directly importing fuel, the Maharaja will not have to pay sales tax on ATF which ranges from four per cent to about 32 per cent across the country. The imposition of sales tax raises ATF prices and makes it almost 50 per cent more expensive than what airlines pay in Singapore or Dubai.
Air India is the second airline after Kingfisher to import fuel directly. The proposed move could pay off for Air India. GMR and GVK have said they are ready to provide storage and refuelling facility at Delhi, Mumbai, Hyderabad and Bangalore to airlines planning to import jet fuel directly. Air India is looking to make Delhi a hub for its global operations.
ashphadnis@thehindu.co.in