Bhupesh Doda, Rakshak Intern from IIM Shillong working with Airports Economic Regulatory Authority of India observes the following: Commercial airlines uses ATF (Aircraft Turbine Fuel) to power their aircraft. ATF price in India is one of the highest in the world. More than 50% of operating cost of an airlines comes from paying the fuel cost and this cost eventually is passed down to the customers. High ATF prices in India is due to cartel behavior by few suppliers (three are state owned and one is private) and multilayer taxation system by the government. Anti-competitive behavior of suppliers can be check by reducing entry barrier and a reasonable taxation system for ATF can certainly lower down the cost to airlines. Which means cheaper flight tickets!
Posted on: Sat, 12 Apr 2014 19:03:33 +0000
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