Delhi, Maharashtra cut ATF tax to 7% to help airlines
Delhi and Maharashtra just dropped the tax on aviation turbine fuel (ATF) to 7% for six months, hoping to give airlines a break from soaring fuel costs caused by the West Asia crisis.
While this move should help airlines stay afloat, experts say you shouldn't expect cheaper flight tickets right away.
IGI CSIA, Delhi ₹1,368cr Maharashtra ₹550-600cr
The tax cuts kick in mid-May and will mainly help big airports like Delhi's IGI and Mumbai's CSIA, where Delhi and Mumbai account for a disproportionately large share of India's air traffic.
ATF now makes up as much as 60% of airline expenses, so relief is welcome, but it comes with a price.
Delhi could lose about ₹1,368 crore a year in revenue, and Maharashtra might see losses between ₹550 crore and ₹600 crore.
Whether flight prices actually drop depends on how global fuel prices hold up.