Direct ATF import may not solve airlines' woes: HSBC report

Mumbai: Direct import of aviation turbine fuel (ATF) by airlines, a recent proposal by an empowered group of ministers which is awaiting Cabinet nod, may not solve the civil aviation industry's woes, according to a recent report by HSBC.
"The actual benefit, if any, would be limited and much less than the current anticipation of 10 percent fuel cost savings. Fuel cost saving greater than 5 percent is unlikely in our view, as fuel price is rising and in all likelihood, airlines would benefit on only a portion of their total fuel consumption as opposed to the general expectation of the entire usage," the report said.
The report has also concluded that the initiative will take time and depend on many factors and several stakeholders.
The more likely option, it says, will be a mid-way path where airlines use a mix of direct imports and source oil from domestic marketing companies (OMCs) or if the OMCs offer more lucrative rates to the airlines, like taking a cut on their marketing mark-up price and offer better rates.
19/02/12 PTI/Economic Times

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Categories: Foreign Feb 2012, Indian Aviation- In General Feb 2012