Indian Airlines is likely to save Rs 100 crore (Rs 1 billion) in its fuel bill if the aviation turbine fuel prices remain at the current levels.
With the latest slash in ATF prices the average national would work out to be approximately Rs 20,000 per kilolitre.
The prices in ATF vary from state to state on the basis of sales tax and the proximity to a sea port.
For instance the price of a kilolitre of ATF is Rs 18,571 in Mumbai while in Chennai it is Rs 20,131, due to a sales tax of 29 per cent.
The state-owned international carrier, Air-India, is also likely to save Rs 160 crore (Rs 1.6 billion) due to the 20 per cent drop in ATF prices between April and May, if the price of fuel remains at the current levels of US Cents 105 per US gallon. The airline's saving per month would be about Rs 13 to 15 crore (Rs 130-150 million).
For IA, excluding Alliance Air, the estimated fuel bill for 2002-03 worked out to be Rs 1,080 crore (Rs 10.8 billion), while its fuel consumption was 490,000 kilolitre. The average cost per kilolitre for the year 2002-03 for the airline worked out at Rs 22,040.
If ATF costs remain at approximately Rs 20,000 per kilolitre this financial year and IA maintains its consumption at 490,000 kilolitre, it is expected that the carrier's fuel bill would work out in the region of Rs 980 crore (Rs 9.8 billion).
For any airline the fuel costs accounts for 30 per cent of its operating costs and around 18 per cent to 20 per cent of its total expenditure.
The hike in fuel prices, therefore have a direct effect on passenger fares. For instance due to 12 per cent increase in fuel prices in March this year , fares were hiked by 15 per cent by all the domestic carriers.
The ATF prices witnessed a 46 per cent increase from April 2002 to March 2003. In March 2003 while the price of ATF was Rs 25,200 per kiloitre, this dropped to Rs 24,200 in April.
© 2025