Airlines studying options to cut fuel costs

Mumbai: Domestic airlines are now exploring various options to cut down on their cost of fuel, which accounts for 40-50 per cent of their overall operating costs.
In what could be seen as a counter answer to the near monopoly of public sector oil companies in aviation turbine fuel (ATF), Jet Airways has already signed a contract with Shell-MRPL (Mangalore Refinery and Petrochemicals Ltd) joint venture while Kingfisher is exploring the option of directly importing ATF. “We are actively exploring the option and some decision should be coming in soon,” a spokesperson for Kingfisher Airlines told Business Line. However, Air India is keeping a more watchful approach.
According to the airline’s Executive Director of Finance, Mr S. Venkat, “We need to take a call keeping the cost economics in mind. While the price of ATF might be 30 per cent less if directly imported, the cost of its storage, refining and distribution to other airports still needs to be worked out.”
He added that if airlines have to individually maintain the infrastructure, it might not turn out to be that cost-effective as thought to be.
Only earlier this week, Jet had announced its two-year contract with Shell-MRPL Aviation Fuels & Services Pvt Ltd. Import of ATF might attract some countervailing duty from the Government and that is some cause for concern, said an industry expert.
18/06/08 Shubhra Tandon/Business Line

To Read the News in full at Source, Click the Headline

Categories: Indian Aviation- In General Jun 2008