MCX hopes airlines will use its ATF futures

Chennai: With aviation turbine fuel (ATF) futures clocking a turnover of Rs 524 crore in July, the Mumbai-based Multi Commodity Exchange hopes that domestic airlines will use the futures to hedge their price risk in the fuel and safeguard themselves from volatility of international prices.
According to Mr Sumesh Parasrampuria, Chief Business Officer, MCX, the board of Spice Jet has approved hedging by the airlines in ATF futures. “However, they are waiting for the opportune moment,” he said.
The AFT futures were launched last month and since then, MCX has seen good volumes. “The contract is witnessing an average daily volume of more than Rs. 56 crores in value terms and over 75,000 barrels in terms of volume,” Mr Parasrampuria said.
ATF, also known as refined kerosene, is a specialised type of fuel used to power aircrafts. It is generally of a higher quality than fuels used in less critical applications such as heating or road transport. It is a blend of hydrocarbons that belongs to the middle distillate group. In some regions, lower quality specification kerosene or a dual-purpose grade is produced and used as a domestic heating fuel, especially in Asia – notably in Japan and Korea. In India, the kerosene is used in three segments - public distribution system for people below poverty line, industrial kerosene and ATF.
04/08/08 M.R. Subramani/Business Line

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Categories: Indian Aviation- In General Aug 2008