Falling crude oil prices has enabled budget airline SpiceJet to give out indications on a possible cut in passenger fares in the next few days.
The ongoing crisis in Greece, a crash in Chinese stock markets and a strong dollar has pushed Brent crude oil prices to $55 per barrel, its lowest level since April this year.
"Some of the drop in the fuel cost does get passed on to consumers one way or the other because there's natural tendency of the industry to compete on fares... We have already seen that happen," SpiceJet COO Sanjiv Kapoor told NDTV Profit.
Estimates show that "fuel costs" occupy about 50% of total operating expenses of the domestic airlines.
"Fuel price is the single largest cost for airlines, especially in India where fuel cost is high. So any drop in fuel cost will benefit the industry significantly," Kapoor added.
08/07/15 Besta Shankar/International Business Times
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The ongoing crisis in Greece, a crash in Chinese stock markets and a strong dollar has pushed Brent crude oil prices to $55 per barrel, its lowest level since April this year.
"Some of the drop in the fuel cost does get passed on to consumers one way or the other because there's natural tendency of the industry to compete on fares... We have already seen that happen," SpiceJet COO Sanjiv Kapoor told NDTV Profit.
Estimates show that "fuel costs" occupy about 50% of total operating expenses of the domestic airlines.
"Fuel price is the single largest cost for airlines, especially in India where fuel cost is high. So any drop in fuel cost will benefit the industry significantly," Kapoor added.
08/07/15 Besta Shankar/International Business Times
