Kingfisher to save Rs 600 cr with direct jet fuel imports

Bangalore/New Delhi: UB group-owned Kingfisher Airlines aims to save at least Rs 600 crore with direct import of aviation turbine fuel through oil companies. It will kick off the arrangement with Reliance Industries (RIL) in two weeks. Direct imports will attract customs duty, but no sales tax, since it is not considered as ‘sale’, UB group chairman Vijay Mallya told ET. “Kingfisher will meet 60% of its requirement through this channel,” he added.
The oil companies will act as handling agents, using their infrastructure at various locations for pumping imported fuel on behalf of the airline.
“Kingfisher Airlines, as India’s biggest aviation group, offers me the scale and size to go for direct imports. My business consumes roughly 700 tonnes of fuel, and I am planning to leverage on this for saving at least Rs 600 crore in the current financial year.
Mr Mallya did not disclose the price at which Kingfisher would strike these deals. Mr Mallya said Kingfisher had even thought of importing fuel from the Middle East on leased air tankers. “I am only using my rights and the economic benefit to bring in a difference to the operational dynamics of Kingfisher, which is targeting break-even in the next financial year,” he added.
02/07/08 Boby Kurian & Nirbhay Kumar/Economic Times

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Categories: Kingfisher Jul 2008