The government is likely to rework the Rs 10,000 crore Aviation Turbine Fuel (ATF) Price Stabilisation Fund because no airline has shown interest in the scheme, government sources told NDTV Profit.
The Union Cabinet approved the fund in June to support airlines and oil marketing companies (OMCs) during the ongoing West Asia crisis.
It has a corpus of Rs 10,000 crore. Under the scheme, airlines were supposed to receive ATF at a fixed cost for 36 months.
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The sources said the move to rework the fund follows the recent hike in ATF prices and the lack of interest in the existing scheme.
The government is likely to hold discussions with OMCs and airlines on a revised design, they said. No details of the changes under consideration were immediately available.
The development comes as airlines press the government for relief on fuel costs.
The Federation of Indian Airlines (FIA), whose members include Air India, IndiGo and SpiceJet, has written to Civil Aviation Minister Kinjarapu Ram Mohan Naidu flagging an "unprecedented" financial impact from the West Asia crisis, according to a copy of the letter seen by NDTV Profit.
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In the letter, the FIA asked that ATF for domestic operations be priced on a cost-plus basis instead of the international benchmark. It also sought rationalisation of excise duty on ATF and of airport charges.
On state levies, the federation requested that value added tax (VAT) relief on ATF offered by Delhi and Mumbai continue. It also asked for relief in VAT on ATF in West Bengal, Tamil Nadu, Karnataka and Telangana.
The FIA's requests centre on how ATF is priced and taxed. The stabilisation fund, by contrast, was designed to give airlines a fixed fuel cost for three years, with the corpus meant to support both carriers and OMCs.
The Civil Aviation Ministry has not publicly commented on the plan to rework the fund. The sources did not say when the discussions with OMCs and airlines would take place or when a revised scheme could be announced.
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