In order to reduce cost, SpiceJet is reportedly set to commence importing jet fuel directly from the quarter starting July 1. Indian carriers currently buy jet fuel from oil-marketing companies (OMCs). However, the Government imposes high taxes on the fuel supplied through oil-marketing company’s, thereby increasing the cost of fuel by 30% to 40% above international rates for the domestic carriers.
In a move aimed at helping the debt-laden airlines bring down their costs, the Government on February 2012, formally allowed the local airlines to import jet fuel directly. The airlines were allowed to import aviation turbine fuel (ATF) under the so-called open-general license.
The discount carrier currently is accelerating its overseas push, while preparing to face competition from Asia’s biggest budget carrier AirAsia Bhd and Jet Airways (India). SpiceJet, India’s second-largest budget carrier by market share currently operates more than 350 daily flights to over 50 Indian cities and 8 international destinations.