Crude fall may help carriers but not fliers

After a long rally which saw crude prices at new highs, the black gold seems to be correcting.
This should bring smiles to the faces of airline executives in India, who have been blaming their losses on the zooming aviation turbine fuel prices.
From its high of $145-plus a barrel, crude climbed down to about $124 this week. Both airline executives and aviation analysts are positive that this slide will reflect in the new prices that oil marketing companies will release soon. An official review of ATF prices would come only at the end of the month, as is the norm.
Airline companies are hoping that the recent slide is the beginning of a correction in oil prices. They want to see oil settle at around $60-70 so that red ink can be wiped off their balance sheets.
"For all you know, prices might go up again. But we are hoping that it will come down to between $60 and $70 and settle there," A Raghunathan, chief financial officer of full-services carrier Kingfisher Airlines, said.
An analyst with a foreign brokerage said, "It is likely that crude will come down to the $75-$80 region and stabilise. If that happens, one of the biggest beneficiaries will be the airlines industry."
Will passenger benefit from the fall in prices? The constant spike in surcharges has been forcing cost-conscious Indian passengers to take other modes of travel. Passenger growth figures in June were negative for the first time in three years.
25/07/08 Nirmal John/DNA MONEY/Sify

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Categories: Indian Aviation- In General Jul 2008