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Airlines raise prices to combat increase in service tax on Air travel

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With the imposition of service tax for Air travel passengers in India in the latest financial budget, the Airline players are forced to increase the process for domestic air travel in India.

Infact, unhappy with the tax policy, the Minister of Aviation, Mr.Ravi is known to have expressed concern to relook at the taxation on passengers. Airlines like Kingfisher Airlines and Jet Airways have already decided to increase the passenger fares due to this development.

According to The International Air Transport Association (IATA) which expressed concern over raising of taxes by India and some countries, has mentioned that being a price sensitive industry, the Airline industry will struggle to maintain its profitability with these actions as India and China are key Air hotspots of Asia.

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