Aviation fuel prices raised by 3 per cent

After eight consecutive cuts, the aviation turbine fuel (ATF) prices were today increased by over 3 per cent. The reduction in ATF prices had eased the burden on airlines’ balance sheets.

The increase across four metros — Delhi, Mumbai, Kolkata and Chennai — ranges from Rs 1,039.31 to Rs 1,089.12 per kilolitre. The increase will be effective this midnight and will continue till the end of this month.

ATF prices have been revised fortnightly since November 2008. Prior to that, the revision used to be monthly. The prices of the aviation fuel in the first fortnight of January were 57 per cent lower than August, when they had peaked at around Rs 75,000 per kilolitre.

According to statistics from oil companies, international crude oil prices increased by $6.70 per barrel over the last fortnight, while international ATF prices increased by over $5 per barrel.

Though the hike is not significant enough to warrant another hike in air fares, major Indian carriers agreed that this was not good news at a time they were not attracting the kind of business they were expecting after recent fare cuts and discount offers.

“It is not that we revise fares every time there is a change in ATF price. However, I would like to say that we have not been able to attract more passengers even after the recent fare cuts,” said an Air India spokesperson.

“The 3 per cent increase is not significant enough to increase air fares. But the truth is that the increase in passenger demand has not offset the cut in airfares,” said SpiceJet CEO Sanjay Aggarwal.