The wholesale prices-based inflation rose by 0.21 per cent at 4.82 per cent during the week ended August 5, as against 4.61 per cent for the previous week, with some manufactured products along with aviation turbine fuel becoming costlier.
Indian carriers can pass on some of the reduction in cost due to the dramatic fall in aviation turbine fuel prices to customers without taking a major hit on their bottomlines. Airlines have also cut costs on a variety of areas, including manpower and distribution, while increasing the fares steeply.
As all airlines have raised carriage charges, private couriers have increased their tariffs 8-20 per cent. India Post, on the other hand, has not tinkered with its tariffs at all. As a result, India Post's tariff is 70 per cent cheaper for domestic destinations and 30 per cent cheaper for international destinations.
Low-cost carriers SpiceJet and IndiGo were two of the main traders of aviation turbine fuel (ATF) at the Multi Commodity Exchange of India (MCX), which started trading of ATF futures on Monday, market sources said. Around Rs 34.8 crore worth of ATF was traded till five on Monday evening.
Bleeding Indian carriers, which suffered another setback in the form of a 7 per cent-hike in aviation turbine fuel (ATF) prices on Tuesday, have decided against raising fares this month. This is the first time this year that the carriers are not increasing prices in spite of a hike in ATF rates.
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.
Air passengers in the Asia Pacific region continue to reap the benefits of the fare war unleashed by the world's leading airlines despite mounting cost of the aviation turbine fuel.
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 fuel prices on Monday were hiked by a steep 5.3 per cent - the tenth straight increase this year -- to an all-time high, in line with a surge in global energy prices. The price of aviation turbine fuel (ATF) -- the fuel that helps aeroplanes fly -- was hiked by Rs 6,188.25 per kilolitre, or 5.29 per cent, to Rs 1,23,039.71 per kl (Rs 123 per litre) in the national capital, according to a price notification of state-owned fuel retailers. This is the 10th straight increase in jet fuel prices this year.
Oil companies have slashed Aviation Turbine Fuel (ATF) prices by Rs 2,221 per kilo litre with effect from midnight on Wednesday.
Inflation rose to over nine-month high at 5.11 per cent for the week ended March 1, due to rise in prices of some manufactured items and aviation turbine fuel, dashing all hopes of interest rate cuts by the RBI to boost the sagging industrial production.The Wholesale Price Index-based Inflation rate stood at 5.02 per cent in the previous week and 6.51 per cent in the correspondingly week a year earlier.
Inflation increased to 3.11 per cent for the week ended November 3, compared to 2.97 per cent a week ago, mainly due to rise in prices of food items, petroleum products and manufactured articles.
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.
The airfare hike will come into effect from October 14.
Domestic airlines expect the fall in prices of aviation fuel to boost their earnings from the quarter ending December.
The domestic aviation industry is expected to report a net loss of Rs 25,000-26,000 crore this fiscal with elevated jet fuel prices and fare caps continuing to pose a major challenge for the airlines' profitability, domestic rating agency ICRA Ltd said on Thursday. The domestic airlines, however, are likely to post a reduced net loss of Rs 14,000-16,000 crore in the next financial year on the back of a "notable recovery" in air passenger traffic and lower level of debt, ICRA said. The ratings agency also estimates that the industry will require an additional funding in the range of Rs 20,000-22,000 crore during FY22-FY24.
IOC, BPCL and HPCL on Thursday afternoon stopped ATF supplies to Air India at six airports - Kochi, Pune, Patna, Ranchi, Vizag and Mohali - over payment defaults. AI flights from these places were tanking up from other airports.
India needs a host of low-cost carriers, like in other countries, to enable more people to fly, global consulting firm A T Kearney said on Friday.
Observing that the Indian aviation industry was passing through a 'fragile and delicate moment', he said some airlines could go bust in the coming few months if 'structural changes are not carried out expeditiously'. As many as 25 carriers worldwide have folded up operations in the past several months due to huge losses, the latest being Italian national carrier Alitalia, leading to over 100,000 jobs in the aviation sector being lost.
Iraq war to hurt Indian airline industry.With war clouds looming large over Iraq, the Indian airline industry is bracing itself against an increase in insurance premium and an additional burden of an estimated 25 per cent hike in ATF.
The 31st meeting of the Goods and Services Tax (GST) Council, held in December 2018, deferred a decision to reduce the GST rate for cement from 28 per cent to 18 per cent. This was despite recognising that cement - along with automobile parts - remained among the few mass-consumption items still taxed at the highest slab, which was originally meant for luxury and sin goods.
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.
The government on Tuesday increased the windfall profit tax on crude oil produced in the country and reduced the levy on exports of diesel. The tax, levied in the form of Special Additional Excise Duty or SAED, on domestically produced crude oil was increased to Rs 9,800 per tonne from Rs 9,050 a tonne, according to an official notification. SAED on the export of diesel was reduced to Rs 2 per litre from Rs 4 a litre and on jet fuel or ATF to nil from Rs 1, the notification said.
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.
Indian Airlines on Wednesday announced a 10 per cent hike in air travel on all domestic sectors with effect from June 21 citing the continuous increase in prices of aviation turbine fuel.
'Visualise those 15 to 18 seconds: Fully loaded aircraft, pilot manually controlling with both hands (no autopilot immediately after takeoff), looking forward while switches are behind.'
Aviation Turbine Fuel, or ATF, price at Delhi was cut by Rs 3,025.34 per kilolitre, or 4 per cent, to Rs 71,800.21 per kl, according to Indian Oil Corp, the nation's largest fuel retailer.
The GST Council on Saturday postponed a decision on cutting tax rate on life and health insurance premiums, officials said. The 55th meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman and comprising state counterparts, decided that some more technicalities needed to be ironed out and tasked the GoM for further deliberations.
Reliance Industries will export about 8-9 million tonnes of petroleum products or 33 per cent of Jamnagar refinery production this fiscal.
Mirroring the state of Indian economy, petroleum product consumption rose 1.8 per cent to 82.48 million tonnes in the first 11 months of the current fiscal as opposed to 81.05 million tonnes sales in the same period last year.
IA may be hurt badly in case of a US attack on Iraq, which would lead to a massive increase in insurance premium and an additional burden of an estimated 25% hike in ATF prices.
Jet fuel prices on Wednesday were hiked by over 18 per cent -- the steepest ever increase -- to all-time high levels after international oil price surged to a multi-year high.
Domestic airlines on Thursday welcomed the 12.5 per cent cut in jet fuel prices, terming it as a much-needed relief but ruled out any immediate reduction in fares.
The cost of non-subsidised LPG -- the one that consumers buy after exhausting their quota of 12 bottles of 14.2-kg at below market price -- has been cut by Rs 100.5 to Rs 637.
Passengers travelling by the nation's airliners could now have to pay increased fares as the country's oil majors have decided to hike aviation turbine fuel (ATF) prices by 8 per cent to a maximum of Rs 2,525.43 per kilolitre.
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