As the aviation industry waits for the benefits of consolidation to land, rising aviation turbine fuel prices promises to play the spoilsport.
BANGALORE: As the aviation industry waits for the benefits of consolidation to land, rising aviation turbine fuel (ATF) prices promises to play the spoilsport.
On Wednesday, oil marketing companies hiked the domestic jet fuel prices by 3.3%.
Last month too, ATF prices had seen a jump — of 2.86%, which prompted airlines to revise upwards their fuel surcharge by Rs 50.
This month’s rise could also compel airlines to further increase fuel surcharge.
Airlines said they would take a decision on any revision of the levy in the next few days.
“We will take a call on this (fuel surcharge revision) in the next two days,” said the Air Deccan spokesperson, echoing peers.
What worries analysts, however, is the impact that such hikes in ATF cost have on airline profits and passenger load factor.
ATF is the costliest component of an airline’s operations.Recognising the threat from climbing fuel prices, airlines are to protecting themselves from its impact. One of the strategies to counter the adverse effects of rising prices is cutting ATF consumption.
Budget carrier SpiceJet, for instance, has been able to reduce its fuel consumption by inducting new generation fuel-efficient aircraft with winglets.
This has helped it bring down its fuel usage from 2375 kilolitres per “block hour” to 2250 kilolitres in the last one year.
A “block hour” is the total journey time taken for a flight, including pushback, taxiing, etc.
For example, the “block hour” in a Mumbai-New Delhi flight is 2 hours, which includes a flying time of 90 minutes and 30 minutes ground time (pushback, taxiing etc).
SpiceJet has followed Jet Airways in adding winglets or small wings attached to the end of the aircraft wings.
A winglet kit costs $500,000 or Rs 20 lakh, and it saves 1-2% on fuel cost.
“Last year this time we had a fleet of five aircraft, of which only one had winglets. This year, out of our eleven aircraft seven have winglets. This has translated into big savings on fuel cost,” said SpiceJet executive chairman Siddhanta Sharma.
Full-service airline Jet Airways has also been able to prune its fuel consumption with 50% of its Boeing fleet (50 aircraft) having winglets.
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