Home Economy Aviation fuel price likely to come down further

Aviation fuel price likely to come down further


New Delhi : Aviation fuel costs will come down by Rs.6,000 per kilolitre when oil prices are revised Saturday, a top official of an oil major indicated Friday.

“ATF (aviation turbine fuel prices) could come down by Rs.5,000 to Rs.6,000 (a kilolitre),” Indian Oil Corp (IOC) chairman Sarthak Behuria told reporters here.

ATF prices, which have dropped 20 percent over the last two months, are due for a revision Nov 1.

The price of the fuel in India is around Rs.44,500 per kilolitre. The Indian airline industry claims fuel constitutes over 35 percent of its operational expenses, and a rate cut would bring down operational costs.

However, the latest round of ATF price slash will not result in this, as yet another airfare hike is in the offing from Nov 1, with airlines and travel agents mutually deciding to add a new component, transaction fee.

The fee would be a minimum of Rs.350 for domestic and maximum of Rs.10,000 for international passengers, said an airline official here.

The zero-percent commission regime will be replaced by the transaction fee, which will be levied along with the airfare, the official said, adding that this will be reflected as “other charges” on the ticket.

Revenues and passenger load for bigger carriers have gone down by 13 percent between September and October, and 37 percent for low cost carriers.

As a result, low fuel costs are unlikely to bring down airfares, said an industry expert.