As crude rises, airlines unlikely to cut fuel surcharge

The upward movement in global prices of oil could see the domestic airline industry do a rethink on the earlier proposal to lower the fuel surcharge following a reduction in aviation turbine fuel prices. Earlier this month, Indian Oil Corporation (IOC) had lowered the price of ATF at the four metros by about 4 per cent as compared to the previous month and this had led to the possibility of some airlines reducing the fuel surcharge.
On January 1, IOC announced that an airline refuelling in Delhi would be charged Rs 45,495.82 per kilolitre (down from Rs 47,444.14 in the previous month), while in Chennai it would pay Rs 49,372.63 per kilolitre (Rs 51,425.19 .
However, after IOC reduced ATF prices, the global price of crude crossed $ 100 a barrel mark before coming back marginally to $ 99 a barrel.
At the moment, most airlines impose a surcharge of Rs 2,025 to offset the increase in fuel prices as ATF accounts for 30-35 per cent of their operating costs. During 2007 itself, the airline industry increased the fuel surcharge four times.
04/01/08 Business Line/Moneycontrol.com

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Categories: Indian Aviation- In General Jan 2008