KATHMANDU, MAY 31

The Airline Operators Association Nepal (AOAN) has sought a reduction in the price of air turbine fuel (ATF) to benefit the domestic aviation sector.

While announcing the budget the government had removed the infrastructure development tax on ATF. Subsequently, Nepal Oil Corporation (NOC) had reduced the price of ATF on May 28 to Rs 65 per litre from Rs 95 a litre.

However, issuing a statement today, AOAN has said the price of ATF should be further reduced as NOC is already earning a profit from its sales.

“Even at Rs 65 per litre NOC earns a profit of Rs 33 a litre from sales of ATF which is not reasonable. Thus, it would be better for NOC to provide ATF at a lower cost taking only 10 per cent profit,” reads the statement. The statement, however, stated that along with this provision domestic airfare is going to decline significantly.

The association has already submitted a request letter to NOC and other concerned authorities requesting for a further reduction in the price of ATF. It has been requesting the government to reduce ATF price since long.

Amid this AOAN has also welcomed the budget for next fiscal year. “COVID-19 has highly affected the aviation sector due to which domestic airline companies are struggling to survive. At this moment AOAN welcomes the government’s decision to exempt airport services charges and provide 20 per cent discount on income tax,” reads the statement.

The statement further appreciated the government’s announcement of providing loans at five per cent interest rate and establishing a separate fund to provide wages of tourism workers. In the mean time, AOAN has also requested the government to monitor the implementation of the budget.

A version of this article appears in e-paper on June 1, 2020, of The Himalayan Times.