Airlines seek lower ATF rates

New Delhi: Faced with rising ATF prices that is causing huge losses to the fiercely competitive airline business, the aviation industry on Tuesday had a meeting with oil PSUs and bluntly told them that they must lower prices "to prevent a repeat of early 90s shutdown of numerous" carriers. While pointing out that prices in India are among the highest in the world, it sent out a not so subtle warning to them — a new consortia of airlines or other agencies may get together to start importing ATF at much cheaper rates.
"From April 2005 to October 2006, crude prices have risen by 16.2% but oil companies have hiked ATF prices here by 31.6 % for domestic carriers. Due to stiff competition, many airlines are selling below cost. The collective loss of the industry in 2006 was Rs 2,000 crore," ministry officials, led by secretary Ashok Chawla, told the PSU representatives.
The last round of ATF price hike led the airlines to increase their fuel surcharge by Rs 50 to Rs 950 on each ticket. Which means that not only are airlines suffering financially, the the passengers also has to directly bear the brunt of high prices.
11/07/07 Saurabh Sinha/Times of India

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Categories: General Aviation Jul 2007