Jet fuel price up, airlines study impact on fares

New Delhi: Oil companies on Tuesday hiked aviation turbine fuel (ATF/jet fuel) prices by 10% or an average of Rs 2,750 per kilolitre.
And airlines, which did not pass on the benefit of 11 successive falls of ATF prices between August and January, will find it difficult to justify fares hikes this time as jet fuel is still at three-and-a-half-year low with prices at June 2005 level.
Only the national carrier, Air India-Indian Airlines combine, categorically ruled out any hike in fares due to Tuesday's hike. "Our low fares will continue," said AI spokesperson Jitendra Bhargava as airlines have again been forced to offer special schemes to get people back on board.
On the other hand, private airlines like Jet and Kingfisher said they would review the impact of the latest ATF price hike and then decide. However, even private carriers admit that hiking the already high fares would be difficult as passenger numbers are still not encouraging.
Now, ATF per kilolitre will cost Rs 29,926 and Rs 30,785 in Delhi and Mumbai respectively, still a far low from the August highs of Rs 71,028 and Rs 73,674 in these two cities. Riding on spiralling crude, ATF prices witnessed five successive jumps from last March and touched all time highs in August. Then oil suddenly cooled off and ATF touched three-to four-year lows by 2008-end. However, airlines which hiked fares after every fuel price increase did not pass on benefit to passengers despite the fact that the aviation ministry got them huge benefits from the oil ministry and Airports Authority for payment of dues.
01/04/09 Times of India

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Categories: Indian Aviation- In General Apr 2009