Government to open up Aviation Turbine Fuel retail

Cruising forward on the effort to dismantle age-old PSU monopoly in the civil aviation sector, the government is now considering opening up aviation fuel retail at Delhi and Mumbai airports to the private sector. In addition, the government is planning to review its norms and allow more domestic airlines access to overseas flight routes. Civil aviation minister Praful Patel said he will meet oil minister Murli Deora to discuss matters related to reducing ATF prices and allowing greater competition in retailing ATF at airports across India. "We had started the pilot initiative with the Hyderabad airport, and now intend to take it forward and open up ATF retail to private oil companies in Delhi and Mumbai airports also," he said. Increased competition, he said, would help bring down fuel prices for airlines and improve their bottomlines. "I will also be requesting the minister to direct oil companies to charge a lower base price on ATF. The margins being charged today by PSU oil companies are way too high. We want them to charge a more realistic margin. This would help reduce ATF prices and boost the aviation industry’s health."

The ministry is also planning to review its existing policy that permits Indian carriers to operate international flights only after five years of domestic flying. he said the policy would be reviewed in the beginning of the 2007-08 fiscal in view of the changed market dynamics and the explosive growth that the aviation industry has witnessed in the past year. "We wanted the airlines to first serve the domestic market and then look at overseas flights. Now, we feel it's time to review this policy," he said. Under the current norms, airlines need to have a five-year domestic track record and a minimum fleet of 20 planes before being eligible to operate international flights. Though Patel did not divulge any details of the review, sources said the government may reduce the five-year limit to three years. If reduced, this would make GR Gopinath's Air Deccan eligible to be designated as a global carrier, and Vijay Mallya's Kingfisher Airline will be next in line. The review would take place only after the merger of Air India and Indian Airlines come into effect.

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