ATF prices fall, air fares won't

New Delhi: Oil companies on Friday slashed aviation turbine fuel prices by 17%, taking the total fall in the past three months to a whopping 38% from the August high. Moreover, the centre on Friday also abolished customs duty of 5% on ATF, which will lead to a further lowering of price on November 15.
But domestic airlines, especially full service ones, are unlikely to reduce the high fuel surcharge amounts they started levying when ATF was at its peak in August, citing huge accumulated losses.
Friday's cut has taken ATF prices to the level of March 2008 when all domestic sectors had a uniform surcharge of Rs 1,650. But the surcharge today is nearly double as it got hiked several times from then and base fares are also higher. A short sector flight has a fuel surcharge of Rs 2,250-Rs 2,350 and medium ones have a cess of Rs 2,900-3,100. Overall, fares have now almost doubled or gone even higher since March, leading to fewer people flying within India this summer than last summer.
Only low cost carrier SpiceJet said it was considering a reduction in fares in coming days, the full service ones remained tightlipped. In fact, national carrier Air India ruled out any reduction in fares.
Jet Airways CEO Wolfgang Prock-Schauer said the airline could comment only after seeing the price of ATF with the customs duty cut being factored in. "...We will assess the situation next week and fares remain unchanged for now."
01/11/08 Saurabh Sinha/Times of India

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Categories: Indian Aviation- In General Nov 2008