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Jet fuel price cut 11.3% to Rs 46,513 a kilolitre

Jet fuel prices have been cut by 11.3% bringing further relief to domestic airlines.

In Delhi the price of aviation turbine has been cut from Rs 52,423 a kilolitre to Rs 46,513 a kilolitre. 

In January jet fuel price was slashed by 12.5% and between October and December last year,  prices declined 11%.

Fuel costs account for about 40% of an airline’s operating expenses. Domestic airlines pay more for fuel than their regional peers, owing to state and central levies.

For airlines, hit hard by high fuel costs for much of 2013 and the first part of last year, the drop in jet fuel prices will mean lower operating costs and improved profitability.

While a few foreign airlines including AirAsia and Qantas have reduced or abolished fuel surcharges, Indian carriers have not taken a call to reduce fares. 

Credit rating firm CRISIL expects Indian carriers to post an operating profit of Rs 8,100 crore in 2015-16 due to lower fuel price and growth in demand . However, Air India, Jet Airways and SpiceJet aren’t expected to report net profits, as they are in need of fund infusion, CRISIL said last month.

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