Friday, September 28, 2018

Plans of airlines for festival season to take a hit – Here is why

New Delhi: The government’s decision to impose a 5% import duty on aviation turbine fuel (ATF) could adversely impact airlines’ plans to cash in on the upcoming holiday season. The customs duty comes at a time when the ATF prices are at a four-year high and rupee value has significantly depreciated.

While the major domestic carriers were looking to raise fares for the Diwali festival season owing to strong demand traditionally, the duty could offset their plans to recover rising input costs with these fare hikes.

The government on Wednesday announced increase in the import duty on 19 major commodities, including ATF, to support the domestic currency.

To be sure, the import of jet fuel is just 4-5% of the total consumption by airlines. India imported ATF valued at $76 million in April-August FY19, up 27% over the year-ago period.
28/09/18 Arun Nayal/Financial Express

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