At a time when aviation industry is facing high Aviation Turbine Fuel (ATF) prices, the industry body -- International Air Transport Association (IATA) has praised Indian government’s Rs 10,000 crore ATF price stabilisation fund decision. The industry body said that the setting up of stabilisation fund is a very good solution to address the problem of higher jet fuel costs being faced by the domestic airlines. The fund for Oil Marketing Companies (OMCs) would help provide ATF price stabilisation support to scheduled Indian airlines for their domestic and international operations.
Highlighting the unprecedented cost impact of current global jet fuel scenario, Hemant Mistry, Director Energy Transition at IATA has flagged more demand destruction in industry amid rising operational costs, driven by higher jet fuel prices. IndiGo, Air India and Air India Express have temporarily curtailed their networks amid surging jet fuel prices as well as relatively lower demand.
Further, he said that the jet fuel prices are dissociated from the prices of crude. He noted that average price of jet fuel increased from $96 per barrel in November last year to $188 per barrel in April this year and has settled at around $156 per barrel. He cautioned that if the situation continues, there would have to be more flight reductions. IATA represents over 370 airlines, including Air India, IndiGo, Air India Express and SpiceJet. The grouping accounts for around 85% of the global air traffic.
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