ATF prices cut to 14 month low, airlines pocket savings

State run oil marketing companies (OMCs) have reduced Aviation Turbine Fuel (ATF) prices by Rs. 5,580 per kilolitre (KL) in line with global reductions in crude prices.

This is the fifth cut in ATF prices since August 2008, when rates rose to an all time high of Rs 71,028.26 per KL. ATF prices have reduced by more than 30% during the month of November itself.

As of today, prices are at par with September 2007 prices, at Rs 38,163.23 per KL.

The reduction is part of the government’s response to pleas by airlines for help. The government had instructed the OMCs, to adjust prices on a fortnightly basis instead of the previous monthly basis.

Airlines, especially full service carriers, however, remained non-committal, preferring to pocket the savings, rather than passing on the benefit to passengers.

They said they would watch the situation for a little longer before deciding on cutting fares.

About Devesh Agarwal

A electronics and automotive product management, marketing and branding expert, he was awarded a silver medal at the Lockheed Martin innovation competition 2010. He is ranked 6th on Mashable's list of aviation pros on Twitter and in addition to Bangalore Aviation, he has contributed to leading publications like Aviation Week, Conde Nast Traveller India, The Economic Times, and The Mint (a Wall Street Journal content partner). He remains a frequent flier and shares the good, the bad, and the ugly about the Indian aviation industry without fear or favour.

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