Jet fuel price cut may not bring down air fares, say analysts

Mumbai: The two per cent cut in jet fuel prices on Thursday will have little impact on airline companies, analysts say. Fuel accounts for 40 per cent of airline companies' expenditure.
Passenger fares are not headed down for now. “The aviation sector is reeling under losses. And in such a scenario, it will be difficult to bring down the fares. Airlines would use any dip in fuel price to consolidate their profits,” an official of an airline company said.
Aviation analysts feel that the difference would be minimal. “Since international oil prices seem to be stabilising on the higher side, a two per cent reduction on the jet fuel prices will hardly make any difference,” said Mr Amrit Pandurangi of Deloitte.
01/06/12 Nivedita Ganguly/Business Line

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Categories: Indian Aviation- In General Jun 2012