NEW DELHI: Aviation turbine fuel (ATF) rates were on Thursday reduced by a steep 12.5 per cent, a move that promises to bring the much needed relief to the aviation industry which has not seen a healthy balance sheet in 2014.
This is the sixth straight cut since August, as international oil prices have slumped to a five-year low and is trading at $55 to $60 to a barrel.
In Delhi ATF price was cut by Rs.7520.52 per kilolitre and it would now be sold at Rs.52,422.92 per kiloliter, oil marketing companies said Thursday.
“ATF (or jet fuel) rate per kilolitre in Delhi today is reduced (by) 12.5 per cent, or by approx Rs.7,500 per kl. Much-needed relief given high cost of operations in India,” SpiceJet chief operating officer Sanjiv Kapoor tweeted.
For the airline which is struggling with weak finances the cut will mean a much needed respite.
However, whether or not the move will translate to cheaper air tickets will remain to be seen in the days to come. ATF rates now are at their lowest level since February 2011. Jet fuel prices had hit an all-time high of Rs.76,241.33 per kl in January but have since then receded.
Jet fuel constitutes over 40 per cent of an airline's operating costs and the price cut will ease the financial burden of cash-strapped carriers.