After slashing VAT on jet fuel, Tamil Nadu government asks airlines to add more services from Chennai airport

In a bid to boost connectivity, the Tamil Nadu government has reached out to various airlines to increase the number of flights and serve more destinations, both domestic and abroad from Chennai airport.

In recent times, quite a few meetings were held between the Tamil Nadu government, AAI and the airlines, and whenever the government had asked them to add more flights and expand connectivity, one of the primary demands of the airlines was that Value Added Tax (VAT) on aviation turbine fuel (ATF) be decreased.

As the jet fuel accounts to a considerable part of an airline’s operating cost, the airlines, AAI and the Ministry of Civil Aviation too had been pushing for it for a while now.

After announcing the steep cut on the VAT on ATF at Chennai airport from 29 per cent to 16 per cent, sources said, the airlines were happy and have assured to expand further from Chennai airport. “We have been constantly persuading them to connect more destinations. Now that VAT has been slashed, the airline representatives have agreed to add more flights. We hope to see a difference soon,” a source said. The government has requested one of the airlines for a direct flight to Japan from Chennai.

One of the largest airline operators at Chennai airport has promised to increase the number of flights by nearly 25 per cent and another prominent operator by eight per cent, another source said. “But they have not promised a timeframe. There may not be an immediate impact in the increase in the number of flights at Chennai. We have to wait and see if there is an increase in the summer schedule,” the source added. 

Sources said, the State government must also work even more aggressively to create the demand by generating thousands of high value jobs. Some of the airlines also welcomed the decision to cut back the VAT on jet fuel.

IndiGo, in a statement said: “We welcome the Government of Tamil Nadu’s decision to reduce VAT on Aviation Turbine Fuel (ATF) and extend our sincere appreciation to the Honourable Chief Minister, @TVKVijayHQ, for this progressive initiative. Such measures strengthen air connectivity, support the state’s tourism and economic growth, and contribute to a more robust aviation ecosystem in India. We hope similar progressive initiatives will make air travel more accessible.“