Lok Sabha Question No. 340 (STARRED), answered on 2016-12-08
Subject: Share of ATF in Operating Cost of Airlines
Ministry: CIVIL AVIATION
Asked by: SATISH CHANDRA DUBEY

## GOVERNMENT OF INDIA

STARRED (To be answered

MINISTRY OF CIVIL A VIATION LOK SABHA 340 on the December 2016)

## SHARE OF ATF IN OPERATING COST OF AIRLINES

## *340. SHRI SATISH CHANDRA DUBEY

## Will the Minister of CIVIL-AVIATION

be pleased to state:-

- (a) the share of Aviation Turbine Fuel (ATF) in total operating cost of any airline;
- (c) the tax charged on ATF per kilolitre;
- (e) whether the benefit 0f decline in the prices of ATF is also likely to be passed on to passengers by all the airlines and if so, the details thereof?
- (d) whether the burden of the increase in the prices of ATF is likely to be passed on to the passengers and if s0, the details thereof; and

## ANSWER

(Shri Ashok Gajapathi Raju Pusapati)

Minister of CIVIL AVIATION

- (a) to (e): A Statement is laid on the table of the House:
- Reply of part (a) to (e) to Lok Sabha Starred(*\_ Question no. 340 regarding "Share of ATF in Air Fare" \_
- (a): Aviation Turbine Fuel (ATF) constitutes about 40-50% of Operational cost of an airline in India. ``
- (b): The ATF prices during the from June 2015 to August 2016 is at Annexure. period
- (c): Basic excise duty 14% is applicable on manufacture of Aviation Turbine Fuel (ATF): However, ATF drawn by operators or cargo operators from the Regional Connectivity Scheme (RCS) airports is subject to basic excise duty at a concessional rate of 2%, for a period of 3 years from 26.08.2016 25.8.2019. Basic excise duty of 8% is applicable for supply of ATF to schedule commuter airlines (SCA) from the regional connectivity scheme (RCS) Airports The VAT charged at Delhi, Mumbai, Kolkata Airport is 25 % and 29% for Chennai Airport: upto
- (d) and (e): No such analysis has been carried out by the Government: Air fares are, established by the airlines under the provision of Sub Rule (1) of Rule 135 of Aircraft Rules 1937. considering all relevant factors, including the cost of operation; characteristics of service, reasonable profit and the generally prevailing tariff: The airfares so established are required to be displayed under the provisions of Sub Rule (2) of Rule 135 of Aircraft Rules 1937. Airline remains compliant to the regulatory provisions of Rule 135 as long as the fare charged by them does not exceed the fare established and displayed on their website.Airfares are not regulated by the Government and airlines are free to fix reasonable charges/fee subject to compliance with rule 135 of Aircraft Rules 1937. The prices are fixed by airlines keeping in mind the market demand, seasonality and other market forces

Source HPCL

## 2016 Ayg

(Rs. Per Litre)

| Effective date   |   Delhi | Miumbai   | Kolkata   | Chennai   |
|------------------|---------|-----------|-----------|-----------|
| 01.06.2015       |   53.35 | 54.73     | 62.93     | 58.72     |
| 01.07.2015       |   51.27 | 52.59     | 60.78     | 56.52     |
| 01.08.2015       |   46.41 | 47.52     | 55.68     | 51.22     |
| 01.09.2015       |   40.94 | 41.95     | 49.31     | 45.45     |
| 01.10.2015       |   43.18 |           | 51.68     | '47.86    |
| 01.11.2015       |   43.04 |           | 51.39     | 47.57     |
| 01.12.2015       |   44.32 | 43.45     | 50.84     | 47.02     |
| 01.01.2016       |   39.89 | 39.01     | 46.37     | 42.42     |
| 01.02.2016       |   35.13 | 34.28     | 41.48     | 37.59     |
| 01.03.2016       |   39.3  | 38.43     | 46.04     | 41.99     |
| 01.04.2016       |   42.16 | 41.77     | 47.09     | 44.82     |
| 01.05.2016       |   42.78 | 41.76     | 47.56     | 45.35     |
| 01.06.2016       |   46.73 | 45.70     | 51.49     | 49.40     |
| 01.07.2016       |   49.29 | 48.32     | 54,11     | 52.11     |
| 01.08.2016       |   47.21 | 46.24     | 52.09     | 49.99     |