Govt to consult IOC on Kingfisher's plea for jet fuel import

The Indian government will consultIndian Oil Corporation before taking decision on Kingfisher Airlines ' requestfor direct import of the jet fuel which will help the crisis-ridden carrier tosave taxes and costs.

"We will ask the IOC. They will recommend, though theirrecommendation is not binding on us," Director General of Foreign Trade(DGFT) Anup Pujari said.

As per the Foreign Trade Policy, only state tradingenterprises like IOC are allowed to import the ATF. However, DGFT has powers to"grant an authorisation to any other person to import any of thesegoods...on the grounds of genuine hardship".

The DGFT is yet to receive the Kingfisher's applicationseeking permission for direct import of Aviation Turbine Fuel (ATF), he said.Kingfisher had said on November 15 that it has made an application to DGFT.

Asked whether government can permit policy relaxation, theDGFT said the foreign trade rules do allow for this. But, the applicant has toprove it is facing "genuine hardship".

Pujari, however, sounded cautious stating "this way,others may also seek similar exemptions..."

They may not be in a crisis situation as Kingfisher, butmost of the airlines are in dire financial state. Kingfisher reported a netloss of Rs 468.66 crore for the second quarter ended September 30. It has adebt of over Rs 6,000 crore.

Jet Airlines which has bigger fleet and wider operationsalso posted a net loss of Rs 714 crore and the Spicejet bottomline was bleedingby Rs 240 crore.

It is estimated that jet fuel costs are almost 50 per centof the total operating expenses of the airline.