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Thai LCCs plead for fuel tax reduction
A group of five Thailand based low cost carriers have called on the government for tax relief to stave off losses.
Led by Thai AirAsia, the airlines want the tax reduced.
It submitted a request alongside Nok Air, Bangkok Airways, Thai VietJet Air and Thai Lion Air.
According to Tassapon Bijleveld, executive chairman of Thai AirAsia parent Asia Aviation, the weak economy and the Thai baht’s strength is resulting in heavy losses.
Jet fuel accounts for about a third of airline costs, but the current market won’t support increased airfares, he said.
In the past two years excise tax on jet fuel has gone from THB0.2 per litre to nearly THB5 per litre.
"If there is no proper solution on the excise tax on jet fuel, some low-cost airlines might have to reduce the size of operations or even stop operating next year," Tassapon said.
Finance minister Uttama Savanayana will consider the request and may appoint a committee made up of airlines and government officials to look at it.
"There are two possible solutions to lower operating costs for airlines: temporarily decreasing the excise tax for two to three years until airline operators get back on track, or lowering the excise tax on jet fuel by a specific rate based on the currency exchange," said Charnkrij Dejvitak, the deputy minister attached to the prime minister’s office.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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