Marking the second reduction since April, Jet fuel or ATF prices were slashed by 1% on Thursday tracing a decline in international rates. ATF prices were reduced by 4%, or Rs 3,025.34 per kl, on April 1.
According to Indian Oil Corporation (IOC) the nation’s largest fuel retailer, the price of aviation turbine fuel (ATF) in Delhi was lowered by Rs 766.34 per kilolitre, or 1%, to Rs71,033.87 per kl, while in Mumbai it costs Rs 73,306.89 per kl as against Rs74,105.16 per kl previously. Rates vary at different airports because of local sales tax or VAT.
The price cut is expected to reduce the financial burden of the cash-strapped carriers, since Jet fuel comprises about 50% of airline expenditure. Further, this fall has been complemented by the strengthening of rupee against the dollar in the last couple of months. Despite the fall in fuel prices, especially for the fourth quarter of FY 14, it is unlikely that airlines will come out of the red. According to a Center for Asia Pacific Aviation (CAPA) report, Indian airlines, Air India, Jet Airways and Spice Jet, are expected to post a combined loss of $ 1.2 billion (about R7,500 crore) for FY 2014.
