Click to play videoMumbai: A drop in jet fuel prices is good news for the airline industry, you would think.
But airline operators don't think the cut of Rs 3,239 per 1,000 litre in the prices of Aviation Turbine Fuel by oil manufacturing companies will provide them much respite.
That's because the aviation industry is already gearing up to post losses of $2 billion in this financial year.
“There is a lot of work to be done from an industry situation. So there is no question of lowering prices, that's not on the table in my point of view,” says CEO, Jet Airways, Wolfgang Prock-Shauer.
Agrees CFO of Spice Jet, Partha Sathi Basu. “Compared to a 60 per cent hike in ATF prices this year versus a 4 per cent cut is nothing much, so we will not cut fares now. Maybe in July, if there is any further reduction, we may consider,” he says.
But that’s a big if as airlines are still struggling to cut mounting losses and earlier this week, all major airlines passed on the entire 18.5 per cent increase in ATF prices to their passengers.
Airlines increased fuel surcharge for short haul distances up to 750 km by Rs 300 and by Rs 550 for distances beyond 750 km.
Currently airlines are lobbying for a cut in the 30 per cent sales tax levied on ATF in most states. While that may take a while, the industry is hopeful that crude continues to trend downwards.
Only then will both passengers and airlines get some respite.
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