Wednesday, September 02, 2015

ATF prices descend, but airfares maintain altitude

New Delhi: A steep 11.7 per cent decrease in the price of jet fuel have raised the hopes of fliers of a further slump in airfares, but airlines are non-committal.

Airlines refused to comment on the decline in aviation turbine fuel (ATF) prices, or whether they would contemplate slashing fares against the backdrop of jet fuel prices, decreasing from Rs 46,407.36 per kilolitre (in Delhi) in August, to Rs 40,938.24, this month.

However, the prices vary across the country due to the sales tax component stipulated by various states. In Kolkata, ATF would cost Rs 49,318.92 per kilolitre, Chennai Rs 45,448.32, and Mumbai Rs 41,846.75. If one compares the September price with that of July, there is a decrease of 12,415.68 per kilolitre in 90 days in Delhi. In Chennai, the decrease during this period is Rs 13,725, Mumbai Rs 12,880.74, and in Kolkata it is Rs 13,609.45.

The question that fliers are asking is whether airlines are prepared to pass on the benefits they were getting to the customers. The spending on jet fuel is about 40-50 per cent of the total expenses incurred by an airline. A fall in ATF prices thus helps reduce expenses.
02/09/15 Deccan Herald
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