The Hindu Business Line : CM announces sops for aviation sector

Mr Ronojoy Dutta (left), President, Air Sahara, greets the Chief Minister, Dr Y.S. Rajasekhara Reddy, at the launch of the Air Sahara Hub in the twin cities on Friday. Mr Alok Sharma, Executive Vice-President, Air Sahara, is also seen. - A. Roy Chowdhury

Hyderabad , Nov. 5

A CONCESSIONAL agreement that would pave the way for the completion of the international airport on the city outskirts would be signed in 10 days.

Disclosing this here on Friday, the Andhra Pradesh Chief Minister, Dr Y.S. Rajasekhara Reddy, hoped an early financial closure and completion of the project as per the schedule.

Dr Reddy was addressing a press conference where Air Sahara announced creation of `Hub Hyderabad' here.

The Rs 1,200-crore airport is being taken implemented by GMR-Malaysia Airport Holdings Berhad consortium, Airports Authority of India (AAI) and the Andhra Pradesh Government.

While the Indo-Malaysian consortium held 74 per cent, AAI and Andhra Pradesh Government carried 13 per cent each in the joint venture Hyderabad International Airport Ltd. The 5,000-acre airport is coming up at Shamsabad near here. Announcing a package of incentives for the aviation industry, the Chief Minister said the State adopted a three-pronged strategy to develop the sector.

"Development of airports, increase in flight connectivity and encouragement to low-cost airlines are the three major areas," he said.

Referring to the recent hike in sales tax (ST) on aviation turbine fuel (ATF), the Chief Minister said the Government had evolved a special package that would induce airlines to operate more flights.

"Airlines that operate more than 140 flights a week will attract just 5.5 per cent ST, against the normal 30.5 per cent. Those who operate 100 to 139 flights will pay just 15.5 per cent," he said.

There will be no ST on ATF for aircraft with less than 50 seats and touching other airports excluding Hyderabad.

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