The prices of aviation turbine fuel (ATF) was hiked on Wednesday by 9.2% as a consequence of increase in crude oil prices in the global market. Crude oil prices in the international market recently touched $50 per barrel from a low of $30 per barrel. The hike comes at a time when domestic airlines are trying to recover financially on the back of substantial decrease in oil prices which constitute 40% of their total operating cost.
In FY16 two financially beleaguered airlines — SpiceJet and Jet Airways have started to register net profits as consequence of sharp decrease in the fuel bill which constitutes 40% of the total expenses of an airline. The financial turnaround also positively impacted the stock performance of the airlines.
As a result of subdued oil prices, state run full service airline Air India has also managed to register operating profit for the first time after the merger with the Indian Airlines. Though most of the domestic airlines have improved operationally, the decrease in the fuel expenses came as a boon.
“Jet fuel price in India is one of the highest in the world and now the increase in the fuel prices will
put pressure on the yields and may impact profitability in the future. Given the intense competition, the airlines cannot pass the increased cost to the customer which is also another problem,” said a senior executive of an airline.
ATF (aircraft turbine fuel) price in Delhi was increased by Rs 3,945.47 per kilolitre, or 9.2%, to Rs 46,729.48 per kilolitre.
Non-subsidised LPG price raised by
Rs 21 a cylinder
PTI adds: Oil firms raised prices of non-subsidised LPG, which consumers buy after exhausting their quota of 12, by Rs 21 per 14.2-kg cylinder, the second monthly increase in rates.
Non-subsidised cooking gas (LPG) now costs Rs 548.50 in Delhi as against R527.50 previously. The hike comes on the back of a R18 per cylinder increase in price on May 1. Subsidised LPG costs Rs 419.18 per 14.2-kg cylinder in Delhi.