The Hindu Business Line : ATF prices to drop; no word on cheaper fares

New Delhi, Nov. 29 Despite oil companies again announcing a reduction the sale price of aviation turbine fuel (ATF) from December 1 this year, domestic aviation companies are not commenting on whether they would make flying cheaper.

Sources in Indian Oil said from December 1 this year there will be an average reduction of between Rs 2.40 and Rs 2.60/litre of ATF being sold to the domestic airlines in the four metro cities. From Monday onwards, airlines will be charged about Rs 37/kilolitre of ATF as against Rs 39.38 being paid at present. Similarly, in Chennai, airlines will pay around Rs 41/litre as against the current price of Rs 43.64.

Officials of the nine domestic airlines declined to comment on whether they will drop fares or reduce surcharge as fuel prices were falling.

GOING DOWN

ATF prices have been consistently going down since September this year. Recently, the Chairman of Kingfisher Airlines, Mr Vijay Mallya, had said his airline will reduce fares across the board only after Government approves the ‘declared goods’ classification for ATF.

The move will ensure that airlines pay a standard 4 per cent sales tax on ATF.

At the moment the sales tax varies from 4 per cent to more than 30 per cent.

‘DROP FARES’

At the recently concluded Hindustan Times Leadership Summit, the Minister for Civil Aviation, Mr Praful Patel had asked the domestic industry to drop fares as the price of ATF was decreasing.

The Minister had hinted that Air India may drop its fares even if other airlines did not.

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