New Delhi: A battling aviation industry was provided some relief, when public sector oil marketing companies announced their biggest ever 16 per cent cut in the prices of aviation turbine fuel (ATF). The cut of Rs11,784 per kilolitre comes into effect today.
With the announcement, officials of the Indian Oil Corporation, have been quoted as saying that the oil marketing companies had done their bit by passing on to carriers all of the reduction in prices of jet fuel in the international market.
The good news, however, will not percolate down to the domestic air traveller as yet. Judging by the reaction of senior airline officials from the private sector, they would much rather recoup losses sustained in earlier months before reducing fares.
Industry experts say that domestic carriers may actually increase fares in the short term. The industry is heading for the winter peak season and lower ATF prices coupled with higher ticket prices would allow carriers to recoup losses incurred over the previous months.
Apart from other reasons, such as an economic downturn, carriers have also been affected by what they term as ''irrational pricing''.
It may be recalled that most carriers had raised fares after the government hiked the price of jet fuel by over 18 per cent, or Rs 10,839.16 per kilolitre on 1 June. It is pertinent to note that they did not reduce fares in a like manner when oil companies cut fuel prices by almost a third, or over Rs3,000 per kilolitre, on 5 June.