Fuel price cut is need of the hour: SpiceJet

Beleaguered carrier SpiceJet on Thursday said the 12.5 per cent cut in jet fuel prices is much-needed relief and will help the companies in reducing their overall cost of operations.

"ATF (aviation turbine fuel) rate per KL in Delhi 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.

The ATF or jet fuel price, at Delhi was cut by Rs 7,520.52 per kilolitre to Rs 52,422.92 per kl by the state-run oil marketing companies.

The cut, effective today, is the sixth reduction in jet fuel rates since August.

The price was last cut by 4.1 per cent, or Rs 2,594.93 per kl, on December 1.

The losses posted by the domestic carriers are generally attributed to the high operating costs.

Fuel makes up about 40-45 per cent of most airlines' overall operating costs. Incidentally, SpiceJet had to ground its operations for almost a day early last month after the oil firms refused to fill its planes across airports in the country due to the airline's failure to make payment for the purchase.

SpiceJet had been put on cash-and-carry about six months ago by the oil companies, who were supplying the airline jet fuel on pre-payment.

Ratings firm CRISIL Research in its recent report had said it expects about 25 per cent lower jet fuel prices for 2015-16 compared with 2013-14.