The government has scrapped the fuel throughput charge that airlines have to pay for lifting aviation turbine fuel (ATF) at airports.

The government estimates the scrapping of the charges would result in airlines saving around Rs 400 crore annually. “Levy of airport operator charge or fuel throughput charge in any manifestation shall be discontinued at all airports, airstrips and heliports across India with immediate effect,” a ministry circular said.

The government should compensate the airport operator for the lost revenue by recalibrating other airport charges, the circular said.

The government had set up a committee to review the issue after airlines took up the matter.

The committee had representatives from airlines, airport operators, oil marketing companies (OMCs) and other service providers.

The move could provide much needed relief to carriers as aviation fuel accounts for almost 40 per cent of any airline’s total expenditure.

“It was seen inter alia that the global best practices at airports avoid levying a double charge by way of land rental on fuel suppliers for the use of land at the airport and a market access or concession fee for providing commercial opportunity when there is no underlying tangible service being rendered by the airport operator,” the circular from the government said.