Faced with the prospect of $1.5 billion losses owing to a slowdown in passenger traffic and high aviation turbine fuel (ATF) costs, airline companies are cancelling or cutting deliveries of new aircraft due this year or sub-leasing them to other carriers globally.
A senior civil aviation ministry official said this was one of the key issues discussed during Civil Aviation Minister Praful Patel's meeting with Prime Minister Manmohan Singh on Wednesday to ask for a relief on ATF. Top airline executives like Jet Airways Chairman Naresh Goyal and Kingfisher Airlines Chairman Vijay Mallya also met the PM to highlight the issue.
Low-cost carrier Deccan Aviation is considering rationalisation of some of its routes as a cost-cutting measure in the backdrop of a hike in aviation turbine fuel (ATF) prices, a top company official said.
A parliamentary panel on Friday recommended for fixing of an upper limit for the economy class airfares to curb the "exorbitant" air fares during the peak tourist seasons.
Hit by soaring fuel prices, the aviation industry is mulling introduction of a "differential fuel surcharge" based on VAT rates in each state to partially offset losses suffered by the air carriers. "Airlines would not be able to survive if the cost of aviation turbine fuel (ATF) is so high and competition brings down the fares," V Thulasidas, chairman and managing director, Air India said.
Confronted with spiralling aviation turbine fuel prices, which account for half an airline's operating costs in India, several low-cost and full-service carriers will go for a steep increase in fares that could vary from 5 to 20 per cent, from June 20. Today's announcement comes three weeks after fares were raised 8 to 10 per cent following a rise in ATF prices (which increased 18 per cent last month).
The Assam police stumbled upon the whole operation when they arrested a HuJI associate, allegedly involved in fake currency and arms racket, on May 21 from Dhubri area of the state
However, domestic carriers said they are not looking at a decrease in airfares. The cut of Rs 11,784 per kilolitre will come into effect from September 1. They also said that the industry would be able to curtail 30 per cent of its monthly losses. Indian carriers are expected to make a cumulative loss of $2 billion in 2008-09.
The jet fuel rate will go up by Rs 104 per kilolitre in Delhi to Rs 32,303, an IOC official said. The increase comes on the back of a 1.8 per cent hike in rates on May 16. On May 1, state-run oil firms marginally reduced the price by one per cent, which had brought the rates in Delhi down to Rs 31,614.51 per kl. In Mumbai, home to the nation's busiest airport, the rate will go up from Rs 33,138 per kl to Rs 33,261 per kl.
Indian Oil, Bharat Petroleum and Hindustan Petroleum raised the aviation turbine fuel price by Rs 585 per kilolitre in Delhi to Rs 32,199 with effect from midnight tonight, an IOC official said. The increase comes on the back of a marginally one per cent reduction effected on May 1, which had brought the rates in Delhi down to Rs 31,614.51 per kl.
At a time when crude oil prices are softening internationally, domestic carriers are raising fares by as much as 10 per cent to boost yields and cut losses. The new rates will be effective from August 1.
The Wadia family-owned GoAir, the country's smallest low-cost carrier, has decided to retrench 10 per cent of its staff. This, it hopes, will help prune its wage bill by 40 per cent -- a clear indication that the axe will fall on several senior-level jobs.
Within a week of shifting from carbonised air-tickets to e-tickets, the Indian air carriers have managed to save estimated Rs 15 crore (Rs 150 milllion), providing them a way to cut costs after the rise in Aviation Turbine Fuel (ATF) prices.
Travel by Air India would cost Rs 300-550 more from June 3 following a hike in fuel surcharge in the wake of oil companies raising Air Turbine Fuel (ATF) prices by 18.5 per cent.
Whole price index inflation will touch zero per cent by March end 2009, on the back of 2 per cent excise duty cut, a 7 per cent cut in ATF prices and a strong base effect," Azis Bank said in a note. The report further said that a revival in demand is unlikely to be so strong and inflation might be negative in April 2009.
International oil and gas giant Royal Dutch Shell is all set to foray into distribution of Aviation Turbine Fuel, fuel for airplanes.
The hike in aviation turbine fuel prices is likely to lead to a 10-14 per cent increase in fares on metro routes and long-haul flights. The oil companies hiked ATF prices by 14 per cent as a result of global rise in crude oil prices over the last few months. Now, most airlines, including Jet Airways and SpiceJet, are looking at imposing a differential surcharge - a smaller increase on shorter routes than longer routes.
Jet Airways said on Thursday it will increase fuel surcharge by Rs 150 on both Club Premiere and Economy Class tickets on domestic routes, with effect from May 4.
Mangalore Refinery and Petrochemicals Ltd, a subsidiary of Oil and Natural Gas Corporation, is considering plans to increase sales of aviation turbine fuel in the domestic market and cut down on exports gradually.
Most of them had to wind up operations due to high operating cost, expensive fuel and longer than expected gestation period.
Crude oil import surged 15.4 per cent to 51.88 million tonnes as against 44.97 million tonnes in April-August and oil product exports jumped 35.7 per cent to 16.61 million tonnes.
The fare will be cheaper as it will be capped at Rs 2,500 per passenger.
An armed forces tribunal has ordered payment of Rs 10 lakh compensation to the widow of a jawan, who died of injuries suffered during a loo break, ruling that a soldier going to toilet while on work was very much on duty.
Air Deccan is going to a lot of sectors where nobody is going, places like Dehra Dun, Belgaum, Hubli and Kolhapur, we are very focused on the other India.
Air Sahara on Tuesday announced a 10 per cent fare hike with effect from June 21 following an increase in the aviation turbine fuel price.
Flying high on the country's aviation industry boom, Indian Oil Corporation expects to continue its double digit growth in the aviation fuel business despite the entry of Oil and Natural Gas Corporation into the segment.
Large trade deficit and rupee decline against the US dollar are putting pressure on the CAD, and these steps are likely to have a positive impact on the external sector.
The Council also discussed process to make return filing simpler with just one return to be filed every month.
Aviation turbine fuel or jet fuel price was on Wednesday hiked by a steep 9.2 per cent, while that of non-subsidised cooking gas was raised by Rs 21 per cylinder.
Public sector oil firms have cut aviation turbine fuel (jet fuel) prices by up to Rs 745 per kilolitre or 1.85 per cent in wake of falling international prices.\n
In a bid to offset a major increase in the price of aviation turbine fuel, Indian Airlines on Saturday announced an across the board 12 per cent hike in fares with effect from April 15.
State oil firms on Wednesday raised jet fuel (aviation turbine fuel) price by 5 per cent in line with the spike in international oil prices, which have touched a record $71 US a barrel.
Following on the footsteps of Indian Airlines, two leading private carriers Jet Airways and Air Sahara on Monday announced increase in fares in all sectors by 12 per cent from April 15.
Airlines are of the view that the cut in prices is too little for them to pass on to consumers, especially after a series of price increases over the last six months.
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