Tuesday, October 24, 2017

Rising ATF Prices: Airlines need to rejig pricing, discounting strategies, says ICRA

The 16.2 per cent year-on-year growth in domestic air traffic during April-August notwithstanding, Indian carriers might need to re-look their pricing and discounting strategies to deal with the uptrend in the prices of aviation turbine fuel (ATF), a research note by ICRA said.
“The domestic passenger traffic growth remained range-bound during the current fiscal as reflected in 16.2 per cent year-on-year growth during 5MFY18. This is marginally higher than y-o-y traffic growth of 15.7 per cent for the month of August 2017, which in turn was slightly better as compared to the previous month,” ICRA stated, adding that it estimated the traffic to grow between 15-17 per cent during FY18, against the 20 per cent growth maintained in the last two consecutive years.
From being priced at an average of Rs 48.65 per litre last month for domestic airlines in four metros, ATF has become dearer at Rs 54.62 per litre from October 1. While jet fuel prices for domestic airlines have remained at the same levels during the calendar year 2017, on a year-on-year basis, the rates are almost 13 per cent higher.
24/10/17 Veerangana Singh/Indian Express
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