Airlines said on Thursday that they were still not in a position to pass on the impact of ATF prices to passengers.
BANGALORE: Aviation turbine fuel (ATF) prices have been slashed by around 16% over the past two months but it will be another month or two before the domestic carriers effect a corresponding cut in the fuel surcharge.
Airlines said on Thursday that they were still not in a position to pass on the impact of ATF prices to passengers as the current 16% cut doesn’t quite match the 35% rise since January this year.
“We computed the impact of the increase in ATF prices over the past one year, and we found that we still have to recover around 10-15% of the impact of the rise. Since January, the ATF prices have tumbled thrice — February (4%), October (8%) and November (8%). That is 20% downward revision of jet fuel prices,” said SpiceJet Ltd CEO and chairman Siddhanta Sharma.
Another reason airlines are shying away from fuel surcharge revision is because of pressure from investors (stakeholders).
Sharma says stakeholders are keeping a hawk on ATF prices. “They feel it is not yet time for a cut in it,” he says.
Go Air chief commercial officer Raj Halve said fuel surcharge, which is levied at Rs 750 per passengers by all airlines, would be reduced before the end of the fog season (January-end).
“Our fuel cost is still high due of congestions at the airports (resulting longer circling time in the air and higher fuel burn) and fog. We will evaluate the situation after the fog season,” Halve said.
Indian Airlines, Air Sahara, Kingfisher Airlines and Jet Airways executives also said that they would wait some more time and watch the emerging situation before taking a call on trimming the current fuel surcharge rate.
Over the last two months, oil companies have, on an average, reduced the ATF prices by Rs 5500-6000 per kilolitre across various states to keep it in line with drop in international crude prices. This month, they slashed it by around Rs 3,000 per kilolitre. The jet fuel prices are currently hovering around Rs 35,000-Rs 42500 per kilolitre.
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