The Hindu Business Line : ATF prices to be reduced from Dec 1 — Airlines yet to decide on lowering fares

THE domestic prices of aviation turbine fuel (ATF) are to be reduced from December 1 but most of the major airlines are yet to firm up plans on reducing the fares.

The Director (Finance) of Indian Oil Corporation, Mr S.V. Narsimhan, on Friday indicated that ATF prices were likely to be reduced by Rs 2,000 per kilolitre from December 1.

"From December 1 ATF prices would be cut. This would be in line with global trends as international oil prices are moving southwards," Mr Narsimhan said on the sidelines of a conference.

The reduction, as and when it is announced, will be the second successive month that the price of ATF will come down.

In the first week of this month, oil companies had reduced the price of ATF by Rs 745 per kilolitre as compared to what was charged in the previous month. The price of fuel constitutes between 30 and 35 per cent of the operating cost of the domestic airline industry.

While the Managing Director of the low-cost airline, Air Deccan, Captain G.R. Gopinath, said the airline would pass on whatever relief it got to the passengers, a spokesman of SpiceJet said that the airline would decide on its action at a later stage. Senior officials of the full service airlines also felt that it was too early to comment on what was being planned.

"Let the proposal be implemented. We will have to see how much we are actually saving before we can take a call on whether fares should be adjusted," an airline official said.

The domestic airline industry has increased fares twice this year mainly due to the northward movement in the prices of ATF. The upward movement in the prices of ATF has seen Indian Airlines alone bear an additional expenditure of Rs 500 crore this year compared with the previous year.

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