Though there are few airports in Maharashtra, the reduction in tax is expected to supplement airline activity within the state. “Apart from the tourist destinations and UNESCO certified sites, cities like Nashik, Nagpur and Aurangabad, which are the business hubs of Maharashtra will surely benefit at large,” informs Kamlesh Barot, Director, Encore Hotels Pvt Ltd. He expects a reduction in the airline ticket fare, one month post the budget announcement.

Kothari is confident that airline companies will offer attractive packages and increase the number of passenger seats. He feels that both the airline and hospitality industry sell perishable products and hence, compliment each other very well. Provided the ticket rates are slashed, the coming season will be fruitful for hoteliers in Maharashtra, who can look forward to exploit the (Meetings, Incentives, Conferences, Exhibition) MICE segment, during the months of July to September.
 
The reduction in tax has been done with the intention of encouraging air travel in the emerging trade centres of Maharashtra. However, the airline companies have not proposed any fare cuts in this regard. Param Kannampilly, Director, Concept Hospitality, says, “It would be difficult to speculate about fare cuts, but the reduction of VAT on ATF will surely help to make our airports more attractive. From a larger perspective, this move will have its implications on the hospitality industry as well.”

Although the tax cuts are not applicable in Mumbai and Pune, Barot feels that these cities will not feel the pinch of higher taxes, due to better road and rail connectivity. According to Kothari, most of the airlines are not running their operations from Mumbai. Hence, the unchanged tax rates in Mumbai and Pune will not be a major concern.