Softening in global oil prices may lead to a cut in aviation turbine fuel prices next month but domestic airlines are unlikely to pass on the benefit to passengers.
NEW DELHI: Softening in global oil prices may lead to a cut in aviation turbine fuel prices next month but domestic airlines are unlikely to pass on the benefit to passengers.
Jet Airways, Kingfisher, SpiceJet and Indigo indicated that passengers would not benefit from the reduction in ATF prices saying air fares do not fully reflect the recent surge in fuel prices.
The basket of crude oil India buys, which averaged USD 132.47 a barrel in July, has slid to USD 113.52 per barrel this month and if the trend continues it may translate into lower ATF prices when they are revised at the end of the month.
State-run Indian Oil, Bharat Petroleum and Hindustan Petroleum revise ATF prices on first of every month.
"We don't pass on the entire burden onto the consumers every time the ATF prices go up. So it is highly unlikely that we will reduce the airfares this month but it also depends on the quantum of ATF price reduction," a Kingfisher Airlines spokesperson said.
These views were mirrored by SpiceJet, when its Chief Commercial Officer Samyukth Sridharan said, "Even if ATF prices are reduced, we will hold on to the current fares for a month. If the prices come down next month also, then we will reduce the fares."
However, state-run Air India said the carrier will revise passenger fare within days of ATF price reduction. "We would fix the passenger fares in a day or two after the ATF price revision."
Jet Airways was, however, not willing to reveal its cards and only said it was too early to predict movement in fares.
Indigo spokesperson said, "Just last week, we introduced lower advance purchase fares and various special offers, for example on the Delhi-Mumbai sector. If as expected the ATF price is revised downward in the coming months, then we would expect to see some additional fare reductions."
"We have not raised the airfares since June. We will see what the ATF prices will be and decide accordingly, " MDLR Executive Director Koustav M Dhar said.
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