Airlines may not reduce fares despite ATF cut

New Delhi: Domestic air carriers do not plan to lower air fares despite state-owned oil companies slashing rates of jet fuel by 4% on Tuesday. The aviation turbine fuel (ATF) rates in Delhi will come down by Rs 1,715 per kilolitre (kl), or 4.09%, to Rs 40,138 per kl from midnight Tuesday, said an official of Indian Oil — the nation’s largest fuel retailer.
In Mumbai, the price of jet fuel will come down by Rs 1,800, or 4.16%, to Rs 41,388 per kl. Jet fuel constitutes about 40% of an airline’s operating cost.
This is the first reduction in rates since July, on softening of international oil prices, and follows two successive rise in prices on August 1 and August 16. ATF rates have gone up on 10 occasions since March. Jet fuel in Delhi was priced at Rs 37,982 per kl in the second half of February before international oil rates started firming up, resulting in an increase in domestic rates.
01/09/10 Anindya Upadhyay/Economic Times

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Categories: Indian Aviation- In General Sep 2010