Another ATF price cut on the cards

Mumbai: Aviation turbine fuel (ATF) prices are likely to be reduced by 10-12% this weekend, which would be the third such cut in the current month. This reduction would be on account of oil marketing companies agreeing to revise prices twice every month.
This means that the benefits of cooling oil prices would now be transferred faster to beleaguered airlines. Oil marketers had reduced ATF prices to Rs 48,656.59 per kilolitre on November one and then to Rs 46,518.85 a kilolitre on November four.
However, airlines are unlikely to pass on the benefits to passengers in the form of cheaper fares.
Jet Airways’ senior general manager KG Vishwanath said, “Fares coming down is unlikely in the peak season. We are expecting ATF to ease by around 10-12% over the weekend.”
Partha Sarathi Basu, chief financial officer, SpiceJet said, “As of now, we haven’t got any news from oil marketing companies on price reduction this week. I wouldn’t be able to comment on fares.”
The international crude oil prices have seen a downward spiral as a result of weakening demand and fears of further slackening of growth due to the current economic crisis. The average price of crude during this month has been as low as $61.65 a barrel as compared to $76.72 a barrel in October. The benefits of this sharp drop are trickling faster to airlines because oil companies had agreed to revise prices every fortnight instead of the monthly cycle.
15/11/08 Nirmal John/Daily News & Analysis

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Categories: Indian Aviation- In General Nov 2008