In a much-needed relief to cash-strapped airlines, this is the second straight monthly reduction in rates and the biggest single cut ever.
Petroleum and oil marketing companies raised the price of commercial liquid petroleum gas (LPG) cylinders by Rs 350.50 per unit and domestic LPG cylinders by Rs 50 per unit with immediate effect from Wednesday.
Jet Air shares rally on expectations that continuing troubles at rival SpiceJet will help it gain market share.
SpiceJet had bet its fortunes heavily on the new version of the 737 of which it has 13 planes in its fleet and another 193 aircraft on order
Jet Airways, part-owned by Abu Dhabi's Etihad, reported its biggest-ever quarterly loss as costs jumped and it took a charge on its investment in a subsidiary.
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.
State-owned oil marketing companies have cut the prices of aviation turbine fuel, or jet fuel, by 12 per cent from midnight tonight - the first fortnightly price revision.
India will require 1,740 planes over the next 20 years.
Sources aware of the development said as part of the project, the airline had signed an agreement with Reliance Industries Ltd, which would extend quality control services at its coastal terminals for ATF imported by the airline.
The government on Wednesday scrapped a week-old tax on the export of petrol and cut windfall taxes on overseas shipment of diesel and ATF as well as the one imposed on domestically produced crude oil after global oil prices fell. While the Rs 6 a litre export duty on petrol was scrapped, the tax on the export of diesel and jet fuel (ATF) was cut by Rs 2 per litre each to Rs 11 and Rs 4 respectively, government notifications showed. The tax on domestically produced crude was also cut to Rs 17,000 per tonne from Rs 23,250, a move that will benefit producers like ONGC and Vedanta Ltd.
If that happens, Jet Airways will be the first bankrupt airline which will be revived under the Insolvency process.
High fuel prices are not only taking a toll on airline companies' balance sheets, but also forcing them to innovate to cut costs.
In a major relief to cash-strapped airlines, jet fuel (ATF) prices were on Monday cut by a steep 4.3 per cent, the first reduction in rates in three-and-a-half months.
In a meeting with stakeholders last week, the authority mooted setting up a Special Purpose Vehicle along with airlines and state-owned oil marketing companies to develop common infrastructure to import ATF, among others, at Chennai and Kolkata airports. While AAI and OMCs will hold 76 per cent in the proposed SPV, the airlines will participate in the remaining 24 per cent equity.
Capa lauded govt's efforts in rescuing SpiceJet.
No frills airlines SpiceJet and IndiGo have merged fuel surcharge with the base fares, saying it would simplify the prevailing fare structure.
Pakistan was ready to buy petroleum products from India if these were offered at "right prices", the country's minister of Petroleum and Natural Resources Asim Hussain said.
Jet Airways on followed its smaller rival SpiceJet and hiked fares by a steep 25 per cent to mitigate the impact of the sharp fall in the rupee value and a near 15 per cent spike in oil prices of late.
Since international oil prices have fallen, the government's subsidy payout will fall by almost Rs 50 per cylinder to Rs 240.
Recent attempts to salvage the situation might not be enough thanks to the rise in jet fuel prices and depreciation of the rupee.
Indian budget airline SpiceJet has agreed to buy around 40 Boeing 737 passenger jets worth over $4 billion at list prices as it seeks to modernize its fleet and climb out of the red, industry sources said on Tuesday.
With declining jet fuel prices, Air India has once again taken the lead in introducing further cuts in its fares on key domestic routes, which may lead to another round of 'fare war' among domestic carriers, including the no-frill ones.
The price of non-subsidised LPG, which customers buy after using up their quota of 12 subsidised cylinders, was raised by Rs 16.50 per 14.2-kg cylinder, the first hike in six months.
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.
Cracks started appearing on Saturday in a grouping of airlines that was planning to suspend flights on August 18 to protest high jet fuel prices and taxes, with budget carrier IndiGo saying it would operate as usual.
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.
In a major relief to cash-strapped airlines, jet fuel (ATF) prices were today reduced by a massive 5 per cent, the steepest reduction in rates since February 2010.
The hike comes on back of over 12 per cent hike on June 15. ATF price on that day were raised by Rs 3,949 to Rs 36,252 per kilolitre in Delhi.
Domestic air passenger traffic plunged around 43 per cent month-on-month at 64 lakh in January 2022 as the third wave of the pandemic and the resultant restrictions by state governments kept flyers away from air travel, Icra said on Tuesday. The domestic passenger volume in December 2021 was recorded at 112 lakh. The rating agency said it is expecting the recovery process to remain subdued during March quarter and that the jet fuel prices continue to be a drag on the sector. The passenger traffic declined 17 per cent last month over 77 lakh passengers transported by domestic airlines on local routes in January 2021, Icra said.
Singapore Airlines General Manager in India C W Foo said India was one of the top five markets across the world for the carrier and it would not allow short term fluctuations to affect its long term strategies in India. Foo said the carrier was looking at increasing its frequencies from Bangalore, New Delhi and Chennai as these routes have dense traffic.
Indian carriers, which are still reeling under high jet fuel prices, are now seeing red over airports increasing the space rental fees by 50 to 450 per cent. Airport charges account for 12-15 per cent of an airline's costs.
'Boeing has returned some cash to the airline which will help it improve the current liquidity crisis.'
Replying to questions on losses to Air India, civil aviation minister Praful Patel said the rally in international crude oil prices that touched $147 a barrel in July 2008, hit Indian carriers by Rs 10,000 crore (Rs 100 billion) in jet fuel bill. Air India loses are a result of high jet fuel prices and fall in air traffic following global economic slowdown, he said. "There are (also) systematic issues which need to be corrected."
As a measure to increase productivity and reduce costs amid rising jet fuel prices, low cost airline GoAir has reduced the number of flights to various sectors.
The worldwide softness in the sector has ensured there are few takers for these aircraft; those who had leased the aircraft to Indian carriers will invoke a hefty penalty if the machines are sent back to them.
No immediate comment was available from airlines on the impact of the price hike on passenger fares.
Consumption-related stocks, such as hotels, and quick service restaurants (QSRs), have been hitting the ball out of the park ahead. On the other hand, the Miss World Pageant scheduled for later this year in New Delhi, too, could provide some tailwind to these stocks, especially hotels and aviation. However, analysts suggest investors put their best foot forward and buy these counters only on a decline given the recent rally and economic headwinds.
Amid record-high fuel prices, Finance Minister Nirmala Sitharaman on Monday said there is no proposal as of now to bring crude oil, petrol, diesel, jet fuel (ATF) and natural gas under the Goods and Services Tax (GST). When the GST was introduced on July 1, 2017, amalgamating over a dozen central and state levies, five commodities - crude oil, natural gas, petrol, diesel, and aviation turbine fuel (ATF) - were kept out of its purview given the revenue dependence of the central and state governments on this sector. This meant that the central government continued to levy excise duty on them while state governments charged VAT. These taxes, with excise duty, in particular, have been raised periodically.
The government has cut the windfall profit tax on crude oil produced in the country while the levy on exports of diesel and ATF has been hiked, an official notification said. The tax, levied in the form of special additional excise duty or SAED, on domestically produced crude oil was reduced to Rs 6,700 per tonne from Rs 7,100 a tonne. SAED on the export of diesel was increased to Rs 6 per litre from Rs 5.50 a litre and on jet fuel or ATF to Rs 4 per litre from Rs 2, the notification said.
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