Skift Take

Taxes on jet fuel are airlines’ single biggest cost, accounting for more than half the expenses for some Indian low-cost carriers. The aviation industry urgently needs relevant policy measures to address them now.

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India is a big potential market for aviation, but not a cheap one due to the high taxes, said International Air Transport Association’s (IATA) Director General Willie Walsh.

Aviation fuel in India is hit with the highest levels of taxes in the world. Airlines have been requesting that it be taxed the same as other goods and services. Vistara CEO Vinod Kannan told Skift earlier about the impact of high fuel costs, in addition to the depreciation of the Indian rupee. In March, the western state of Maharashtra reduced the value added tax on aviation turbine fuel from 25 percent to 18 percent at Mumbai, Pune and Raigad airports

Walsh also noted that the Indian government’s policy that requires the use of sustainable aviation fuel can lead to higher prices. He also highlighted the scale of the economy and investments going into airports in India. In March, civil aviation minister Jyotiraditya Scindia announced that India would invest around $12 billion over the next two years in airports, aircraft and recruitment to meet the booming demand for air travel. Walsh also said that India needs to recognize that the real advantage lies in making fares cheaper for more and more people to fly. Amid the surge in domestic airfares, Scindia asked airlines last week to devise a mechanism for reasonable pricing and “self-monitor” the prices on certain routes

IHG Opens Holiday Inn Katra Vaishno Devi

InterContinental Hotels Group (IHG) has announced the opening of a 98-room Holiday Inn Katra Vaishno Devi in the north Indian union territory of Jammu & Kashmir. “India has been a focused domestic market for IHG and addition of this hotel to our brand portfolio will cater to the growing demand for quality accommodations in secondary markets and more importantly in spiritual circuits,” said Ritesh Sharma, general manager Holiday Inn Katra Vaishno Devi. In March, the company signed a management agreement with Amritsar Golden Hospitality to develop Holiday Inn Amritsar Golden Temple in the north Indian state of Punjab. Last month, Keith Barr said he would step down as CEO of IHG Hotels & Resorts. Elie Maalouf, who headed the American operations, will become the new chief of the UK-based group on July 1.

SpiceJet to Add 10 Boeing 737 Aircraft

Budget carrier SpiceJet has announced plans to induct 10 narrow-body Boeing aircraft, including five B737 Max, on lease by October. The airline said it has already signed a lease agreement for these 10 planes, which will start joining the fleet in September to cater to the rising demand. In the intervening period, the airline is working on restoring and reviving its grounded aircraft which will start returning back to service soon. “The induction of these planes, which coincides with the peak travel season in India, will help us launch new routes and strengthen our presence on existing ones,” said Ajay Singh, chairman and managing director of SpiceJet. Meanwhile, the airline has also commenced operations for Haj pilgrimage trips with flights from five cities — Bhopal, Gaya, Vijayawada, Aurangabad and Srinagar. 

IHCL Signs a SeleQtions Hotel in Kumbhalgarh

Tata Group-owned Indian Hotels Company (IHCL) has announced the signing of its first hotel in Kumbhalgarh in the north Indian state of  Rajasthan. This is a conversion and will be rebranded as a 176-key SeleQtions-branded hotel after renovations. “The signing of this SeleQtions hotel will open a new circuit of Udaipur-Kumbhalgarh- Jodhpur, as also augment our pilgrim offerings. We are delighted to partner with Kumbhalgarh Yatri Niwas for this hotel,” said Suma Venkatesh, executive vice president of real estate and development at IHCL. With the addition of this, IHCL has 23 hotels across Taj, SeleQtions, Vivanta and Ginger in the state, including nine under development.

Vistara Halts Plan to Fly to U.S.

Vistara, a joint venture between Tata Group and Singapore Airlines,  has suspended plans to fly to the U.S. citing lack of enough widebody planes. “The main reason is that to fly to the U.S., I need a lot of aircraft. One single daily operation from India to the U.S. will need at least three aircraft. I have to wait for three aircraft to come and I don’t know it will be spaced out. By the time it will start, the integration (will be) happening,” said Vistara CEO Vinod Kannan. The airline, which is set to be merged with Air India, also expects to add a total of 10 planes as well as hire more than 1,000 people in the current financial year. Currently, Vistara has a fleet of 61 aircraft and a staff strength of over 5,200. Last week, the carrier launched direct five weekly flights between Mumbai and London

Roostels India to Open Experiential Resorts

Roostels India is eyeing opening of 15 franchise-based theme hotels called Roadies Rostel in prominent holiday locations by the end of this financial year. These destinations include Bengaluru, Shimla, Manali, Kasauli and Goa. The company is also looking at garnering gross revenue of $12.12 million. The first resort under this brand is called Roadies Rostel Leisure Arc and will be opening in Ahmedabad in the western state of Gujarat. “All our resorts, including the one in Ahmedabad, are creatively designed to suit the needs of the new-age millennial traveler and fulfill their quest for thrill and adventure,” said Aditya Kushwaha, chairman and founder of Roostels India.


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Tags: Boeing, Boeing 737, fuel prices, iata, ihg, india, Indian Hotels Company, skift india report, spicejet, taxes, vistara

Photo credit: Aviation fuel in India attracts the highest levels of taxes in the world. abhirupsen_haldia / Flights line up as day dawns on New Delhi Domestic Terminal

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