Mumbai: India’s state-owned oil marketing companies are expected to cut jet fuel prices by a further 10% in October, but airlines have no immediate plans to cut fares, said one domestic airline official, on condition of anonymity.
Instead, the major carriers, Air India, Jet Airways and Kingfisher Airlines, have decided to raise fares by about 10% in October.
Beginning September, which marks the start of the peak travel season through March, oil companies have reduced the prices of jet fuel (popularly known as aviation turbine fuel, or ATF, which is about 45% of operating costs for domesitc airlines by 16%.
“With global crude oil prices coming down, oil companies would consider a downward revision of up to 10% of ATF prices,” said an oil company official familiar with the development.
ATF prices in India are based on international import parity prices.
India’s airlines have reduced the number of flights by 20% since June because of growing losses; which also resulted in lower sales of ATF.