"Airlines would not be able to survive if the cost of aviation turbine fuel (ATF) is so high and competition brings down the fares," V Thulasidas, chairman and managing director, Air India said.
The idea of a differential fuel surcharge was put forward during an all-India civil aviation meet attended by ministers and senior officials from various states.
"In some states, sales tax or VAT on ATF is as high as 30 or 35 per cent. I said at the meeting that airlines would be forced to go in for a differential fuel surcharge. We will have to close down if there is no matching hike in air fares," he told PTI.
Explaining the working of the surcharge, he said if a state imposed less tax, it would be less and vice-versa. ATF in India was almost double the global rates and accounted for 40 to 45 per cent of total airlines expenditure compared to 18 to 20 per cent abroad, Thulasidas said adding that crude had gone up from $30 a barrel to $100 in four years while in India it was "higher by 80 to 90 per cent".
Thulasidas, however, allayed fears about retrenchments due to the Air India-Indian merger. "People have misgivings about what is going to happen but we are communicating with them (the airlines unions)
"Legally, we are one company but the physical integration will take some more time," Thulasidas said adding that with complete integration, AI's world ranking would be among the top 30 in terms of revenue.
Moreover, AI joining Star Alliance has made it internationally stronger, he said. Air India had also been focussing on fleet renewal and expansion besides product quality with an ambitious plan to induct 111 new aircraft.
Replying to a question on the age limit issue, Thulasidas said it would be 45 years for flying duties and those crossing it would be utilised as ground staff till 58 in the future. "This in no way means older people are a liability. Experience and expertise matters but it is important to be fit and presentable. The existing crew, however, will continue to be governed by their own service rules," he said.
He said the flag carrier would launch new international flights from major cities in the country including one from Kerala to improve passenger connectivity to Europe or America.
Asked about the recent passenger protests sparked by delays in flights, he said, "We are not the only airline whose flights are sometimes delayed. This happens in any airline in the world under foggy conditions".
The same was the case with the complaint about "mismanagement" of Haj flights from Kerala, Thulasidas said adding that "vested interests instigated such protests".
© 2025