ATF crashes,but air fares to fly high

The ATF prices have risen from May 2010 till April this year by over 55 per cent,they pointed out.

As some of the airlines were facing a near bankruptcy situation with very high accumulated losses,the industry was not in a position to on pass any benefit of ATF rate reduction to customers at this stage,they said.

The officials,all requesting anonymity,said the airlines were already offering various promotional schemes and packages to attract fliers during the peak summer season.

“None of us are in a position at this moment to lower fares any further,” one official said categorically.

Oil companies have put carriers like Air India and Kingfisher on a cash-and-carry basis to pay upfront for their daily ATF consumption.

Fuel cost accounts for 40 per cent of the airlines’ operating costs and the ATF rates vary from airport to airport — ranging from four to over 30 per cent — depending upon the state-level sales tax rates.

For the second fortnight in a row,state-owned oil companies yesterday cut jet fuel prices by about four per cent after international oil rates cooled off from a two-year high.

The two reductions this month have come after 14 successive hikes since October,2010,when international crude oil prices started soaring. ATF rates were cut for the first time in eight months on May 16 by 2.9 per cent.

The ATF price in Delhi on October 1,2010 was Rs 40,728.52 per kl. The rates were increased by Rs 19,831.48 per kl,or 48.7 per cent till April 30 when last price hike was announced.