An airlines industry body has sought reduction in customs and excise duties on aviation turbine fuel and allowing private firms to supply it to bring down prices.
State-run oil firms on Thursday cut aviation turbine fuel (ATF) or jet fuel prices by 4.3 per cent in view of halving of the customs duty on the fuel to five per cent. From today, ATF in Delhi will cost Rs 66,226.66 per kilo litre, down Rs 3,000.42 per kl, while in Mumbai the price has been cut by 4.36 per cent to Rs 68,626.87 per kl, an Indian Oil official said.
The government on Monday scrapped 30-month old windfall profit tax on domestically-produced crude oil and on export of jet fuel (ATF), diesel and petrol following a decline in international oil prices. Minister of State for Finance Pankaj Chaudhary tabled a notification in Rajya Sabha scrapping the levy on crude oil produced by firms like state-owned Oil and Natural Gas Corporation (ONGC) and exports of fuels done by companies like Reliance Industries Ltd.
Weighed down by surging jet fuel prices, Air-India's net profit plunged by a huge 82.54 per cent at Rs 16.29 crore (Rs 162.9 million) for the year 2005-06.
Civil Aviation Minister Praful Patel said Indian airlines had suffered major losses in the past two years over the unprecedented rise in prices of aviation turbine fuel.
While LPG price was raised by Rs 18, kerosene saw a hike of Rs 3 per litre
Shares of low-cost airline IndiGo hit record high on the bourses soon after reports of pilot crisis at Vistara emerged. The development also saw airfares surge by around 25 per cent on select routes. Shares of IndiGo hit a lifetime high of ~3,68.5 on April 2, 2024, and has gained 2.4 per cent on the bourses in April.
However, the reduction in ATF prices will provide some cushion to airlines engaged in a protracted price war have lost control over pricing in one the world's most price sensitive domestic markets.
A subsidised 14.2-kg cylinder will now cost Rs 425.06 in Delhi as against Rs 423.09 previously, according to State-owned oil firms
The carrier had planned a GDR issue in December last year to reduce its debt but had failed to do so as its stock prices began slumping.
Market leader IndiGo on Friday followed its rivals and raised fares by 25 per cent to offset the impact of rupee fall and spike in international crude prices.
In Mumbai, jet fuel will cost Rs 72,830.64 per kl from tomorrow as against Rs 68,103.26 per kl at present.
ATF or jet fuel price has been cut marginally while rate of non-subsidised cooking gas LPG has been hiked by Rs 27.50 a cylinder.
Jet Airways and Kingfisher Airlines may move towards a second round of mergers and acquisitions as smaller low-cost airlines and other rivals, hurt by rising fuel prices, seek an exit from the business to cut losses, an industry expert said. State-run oil firms have hiked jet fuel (aviation turbine fuel) prices by 18.5 per cent in line with rising international crude oil prices.
In India, the aviation industry contributes five per cent of gross domestic product, around Rs 291 crore (Rs 2.91 billion) in tax contributions, provides four million jobs and another seven million jobs through tourism and related activities.
This is the second straight increase in jet fuel rates in as many months.
After three consecutive hikes, state-run oil companies on Thursday reduced jet fuel or ATF prices marginally by about one per cent in tandem with international rates for the same.Indian Oil, Bharat Petroleum and Hindustan Petroleum cut aviation turbine fuel (ATF) price by Rs 311 per kilolitre in Delhi to Rs 31,615 per kl with effect from midnight tonight, an IOC official said.
In a bid to slash costs, Air India has hedged 10,000 barrels of jet fuel for its aircraft this month, four weeks after its Board gave a nod to the move.
Kardassis, who quit the airline in 2013, will advise Goyal and senior management on cost-saving and productivity improvement
Falling jet fuel prices, stable rupee signal lower losses
Air travel became costlier on Tuesday with major Indian carriers hiking fuel surcharge on tickets, ranging from Rs 150 to Rs 250 for domestic travel and $15 (Rs 825) for a one-way international ticket, following an almost eight per cent increase in jet fuel prices.
It is the seventh reduction in jet fuel rates since August
Rising crude oil prices and muted passenger traffic in the July-September quarter (second quarter, or Q2) of 2023-24 (FY24) have raised concerns about the profitability of listed aviation players. These two concerns have caused the stock of InterGlobe Aviation (IndiGo), the largest player in the sector, to slip by 11 per cent since its highs at the end of July. Nuvama Research expects yields to cool down in the near term due to seasonality, rising crude oil prices, and higher capacity.
Public sector oil firms on Thursday raised aviation turbine fuel (jet fuel) prices by up to 2 per cent, the second increase in three months.
Jet Airways, SpiceJet, Kingfisher and other airlines have told the government that they would curtail services frequency and air routes to cut losses after oil companies raised the prices of aviation fuel.
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.
Air India on Thursday increased the fuel surcharge component in fares on several routes.
Brent crude oil price surged 4 per cent on Friday, following tension between Iran and the US. Airlines, however, have been unable to pass on the price increase to customers due to the soft demand.
Though June-quarter performance was impressive, fuel price hikes and falling demand pose fresh challenges for the company.
India's fuel sales surged past pre-pandemic levels in March on twin impact of the economy rebounding from the lifting of pandemic-related restrictions and anticipation of price increases leading to stocking. In the first two weeks of March, dealers, as well as the public, topped up their tanks in anticipation of an increase in prices that had been on hold in the run-up to the elections in states like Uttar Pradesh. While daily price revisions restarted on March 22, the increases were calibrated.
Domestic fares on all sectors became costlier by Rs 200 from Friday with the hike in fuel surcharge, imposed by major airlines due to increase in jet fuel prices.
Budget air-carrier, SpiceJet, expects to break-even this fiscal, a top company official said. The break-even could come on the back of stabilising fuel prices and an increasing demand for low-fare travel, he said. The air-carrier expects oil prices to stablise in the range of $65-70.
Concerned over high service tax substantially raising air ticket prices, Civil Aviation Minister Ajit Singh has urged Finance Minister Pranab Mukherjee to revert to the earlier rates which were capped at Rs 100 and Rs 500 per domestic and international ticket.
IndiGo operates 125 flights across 17 destinations with a fleet of 19 brand new Airbus A-320 aircraft. For the full service carrier, Kingfisher, the drop on flights up to 750 km will be Rs 400 to Rs 1,950 from Rs 2,350 earlier. Fares for travelling above 750 km will be down to Rs 2,700 from Rs 3,100.
Domestic air passenger traffic touched 1.25 crore in January this year, an increase of 96 per cent compared to the year-ago period, according to rating agency Icra. However, it said the traffic remained around 2 per cent lower compared to the pre-Covid levels -- January 2020. The traffic stood at 64 lakh in January last year. Icra is maintaining a negative outlook on the Indian aviation industry, reflecting the view that the financial performance of Indian airlines is likely to remain under pressure in the near term, even though the recovery in domestic passenger traffic has been healthy.
LPG rates were last hiked on November 1 by Rs 2.05 per cylinder. Prior to that rate was hiked on October 28 by Rs 1.5 per cylinder on account of hike in commission paid to dealers.
Despite the increase, at Rs 64.32 per litre ATF costs less than petrol and diesel.
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