📷 Image: Wikimedia Commons / Michael Gäbler
Business
Tamil Nadu reduces aviation fuel tax to ease airline costs
✍️ India Today
🗓 25 Oct 2026, 02:03 AM
👁 21
The Tamil Nadu government announced a cut in the tax on aviation turbine fuel, aiming to lower operating costs for airlines operating in the state.
Chennai, Oct 24 (India Today) – The state cabinet of Tamil Nadu approved a reduction in the excise duty on aviation turbine fuel (ATF) effective from next month. The move is expected to bring down the per-litre cost of ATF, which airlines purchase to power their aircraft, thereby reducing ticket prices and encouraging more travel within the state.
The finance department said the tax cut will lower the ATF price by approximately 10-12 percent, translating into savings for carriers such as IndiGo, Air India and SpiceJet that operate frequent services to and from Chennai International Airport. Officials anticipate that the reduced operating expense will improve airline profitability and could spur additional flight frequencies.
Chief Minister M.K. Stalin welcomed the decision, noting that it aligns with the government's broader agenda of boosting tourism and trade. The Centre has also praised the state’s initiative, calling it a forward‑looking step to support the aviation sector.
Industry analysts view the tax reduction as a timely intervention, especially as the sector recovers from pandemic‑induced losses and faces rising global fuel prices. They expect the policy to make Tamil Nadu a more attractive hub for domestic and regional carriers.
The state will monitor the impact of the tax cut on airline ticket rates and passenger footfall over the coming quarters, with a review slated for early next year.
The finance department said the tax cut will lower the ATF price by approximately 10-12 percent, translating into savings for carriers such as IndiGo, Air India and SpiceJet that operate frequent services to and from Chennai International Airport. Officials anticipate that the reduced operating expense will improve airline profitability and could spur additional flight frequencies.
Chief Minister M.K. Stalin welcomed the decision, noting that it aligns with the government's broader agenda of boosting tourism and trade. The Centre has also praised the state’s initiative, calling it a forward‑looking step to support the aviation sector.
Industry analysts view the tax reduction as a timely intervention, especially as the sector recovers from pandemic‑induced losses and faces rising global fuel prices. They expect the policy to make Tamil Nadu a more attractive hub for domestic and regional carriers.
The state will monitor the impact of the tax cut on airline ticket rates and passenger footfall over the coming quarters, with a review slated for early next year.