Thursday, August 30, 2012

NEWS| Flying a private aircraft becomes costlier as AAI increases MRO royalty charges


The move by AAI to increase this royalty charge will directly impact the MRO service providers who operate from the airports that are run by the state-owned airport authorityOwners of business jets and other privateaircraft who want their flying machines to be serviced in India will have to pay at least 33-37.5% more to their maintenance repair and overhaul (MRO) service providers as the Airports Authority of India (AAI) has increased levies sharply at all AAI-owned airports in the country from this month. The earlier cess, or royalty charge as it is called, was 13%.

The move by AAI to increase this royalty charge will directly impact the MRO service providers who operate from the airports that are run by the state-owned airport authority (it owns 89 domestic airports) as these companies would now have to charge their clients the additional tax along with 12% service tax, a big negative for business and growth. 

Irked by the move and poor timing of the government decision, some of the big MRO players are even considering re-locating business to Middle East. A major player said it is evaluating this re-location. 

OSURCE:http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/flying-a-private-aircraft-becomes-costlier-as-aai-increases-mro-royalty-charges/articleshow/15974603.cms

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