New Delhi/Mumbai: Indian carriers will save about Rs 800 crore this year via the 4% reduction in ATF (aviation turbine fuel) prices implemented by oil refiners early on Wednesday, according to airline executives and analysts.
This will, however, lead airlines, already offering steep discounts on air fares, to slash prices further, the executives said. The cut is the steepest since May last year, an executive at Bharat Petroleum told ET. The prices were dropped after Brent crude slid to a year low of $94.24 on Tuesday.
Jet fuel accounts for the highest chunk of a local carrier's operating costs in India. High levels of state taxes further add to the fuel costs. Chief executives of local carriers recently met India's aviation minister to demand that ATF should be brought under the declared goods category which would bring it under the tax bracket of a uniform 4%.
2/10/14 Anirban Chowdhury & Mihir Mishra/Economic Times
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This will, however, lead airlines, already offering steep discounts on air fares, to slash prices further, the executives said. The cut is the steepest since May last year, an executive at Bharat Petroleum told ET. The prices were dropped after Brent crude slid to a year low of $94.24 on Tuesday.
Jet fuel accounts for the highest chunk of a local carrier's operating costs in India. High levels of state taxes further add to the fuel costs. Chief executives of local carriers recently met India's aviation minister to demand that ATF should be brought under the declared goods category which would bring it under the tax bracket of a uniform 4%.
2/10/14 Anirban Chowdhury & Mihir Mishra/Economic Times
