SpiceJet seeks direct fuel imports; RIL may provide logistics
03 April 2012
Following in the steps of Air India and Kingfisher Airlines, low-cost carrier SpiceJet said on Tuesday that it has filed an application seeking permission from the directorate general of foreign trade (DGFT) to directly import aviation turbine fuel (ATF).
"After discussing the proposal in detail, we decided to go ahead with import of aviation fuel from overseas market. We have applied to the DGFT for permission to import aviation fuel," SpiceJet chief executive Neil Mills said.
Following the government's permission in mid-February for airlines to import jet fuel directly, SpiceJet would import ATF through a private oil marketing company at an airport in southern India as a pilot project to check the economic viability of the process.
Although the private oil company was not named, Business Standard cited sources to say Reliance Industries Ltd is likely to import the ATF for SpiceJet.
''A private oil marketing company has agreed to provide us the infrastructure at the airports and also import fuel for us. As a pilot project to assess the cost advantage of importing directly, we will start importing it directly at an airport in southern India. We expect to start the operation in six to eight weeks,'' said Mills. He said this could help SpiceJet save up to 7 per cent in its fuel bill.
Reliance Industries Ltd and Essar Oil are the only two private oil marketers in the country, but Essar does not have any ATF tanking facility.