Mumbai: Airlines have rejected any reduction in fuel surcharge despite a four per cent cut in the prices of aviation turbine fuel (ATF) announced by state-run oil marketing firms.
ATF has already become cheaper in Delhi by Rs3,000 per kilolitre for domestic airlines and $54 (Rs2,160) per kl for foreign airlines, following a reduction in customs duty on jet fuel from 10 per cent to five per cent. But airlines are in no mood to scale down fares for, what they say, fear of bankruptcy.
Aviation turbine fuel now costs Rs66,226.66 per kl in Delhi against Rs69,227.08 in May.
In Mumbai, the effective price of ATF would come down to Rs68,626.87 per kl from Rs71,759.06, an aviation ministry official said.
Domestic airfares shot up after the oil companies hiked aviation fuel prices by around 19 per cent on May 31.
Airlines had slapped a fuel surcharge of Rs300 on short-haul (up to 750 km) and Rs550 on long-haul trips on domestic routes effective 3 June. This will now remain unchanged, they say.
With fuel bill now accounting for over 50 per cent of an airline's operating costs, a 4.3 per cent reduction in ATF prices is minuscule and will not have a major impact on our operating costs, they argue.
The move, however, has come as a welcome relief for the airline sector that has been grappling with high ATF prices.