ATF price fall not to impact airline fares

As the aviation turbine fuel prices are set to decline for the third month in a row, no relief seems likely for the passengers as the air carriers are in no mood for immediate reduction in the fuel surcharge. The ticket prices are set to rise for the second time in a month (in view of the December-January peak travel season the prices were raised on November 16) as from tomorrow the passengers will have to shell out Rs 150 more as congestion surcharge. The ATF prices have fallen for the fourth time in 2006. The first decline was seen in March, when the prices went down from Rs 35,228 per kilo litre in February to Rs 34,995 per kilo litre in March.

After March however, the prices continued an upward trent rising from Rs 35826.36 in April to Rs 43989.91 in September, forcing the airlines to airlines to hike the fuel surcharge four times within a period of five months. Since September end, with a global crude prices falling, the ATF prices have also seen a steep decline. From Rs 43989 per kilo litre in September to Rs 36150 in December, a decline of 18% in three months. The current ATF prices now stand at almost the same rate as in October 2005, when the aviation fuel prices stood at Rs 36,410 per kilo litre. The airlines are however of the view that since the fuel surcharge was levied only after very steep hike in prices, the industry will only consider a cut in surcharge if the prices continue to show a downward trend in the next two-three months. The ATF prices saw an increase of 22.8%.

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