ATF prices to drop; no word on cheaper fares

New Delhi: Despite oil companies again announcing a reduction the sale price of aviation turbine fuel (ATF) from December 1 this year, domestic aviation companies are not commenting on whether they would make flying cheaper.
Sources in Indian Oil said from December 1 this year there will be an average reduction of between Rs 2.40 and Rs 2.60/litre of ATF being sold to the domestic airlines in the four metro cities. From Monday onwards, airlines will be charged about Rs 37/litre of ATF as against Rs 39.38 being paid at present. Similarly, in Chennai, airlines will pay around Rs 41/litre as against the current price of Rs 43.64.
Officials of the nine domestic airlines declined to comment on whether they will drop fares or reduce surcharge as fuel prices were falling.
ATF prices have been consistently going down since September this year. Recently, the Chairman of Kingfisher Airlines, Mr Vijay Mallya, had said his airline will reduce fares across the board only after Government approves the ‘declared goods’ classification for ATF. The move will ensure that airlines pay a standard 4 per cent sales tax on ATF.
At the moment the sales tax varies from 4 per cent to more than 30 per cent.
29/11/08 Business Line

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Categories: Indian Aviation- In General Nov 2008