Airlines in no mood to cut fares despite lower ATF prices

New Delhi, Nov 15 (PTI) The cash-strapped airline
industry is not yet ready to reduce airfares despite the cut
in jet fuel prices today by another 12 percent, saying that
the heavy losses that accumulated during the past several
months, when the prices peaked, were still to be recovered.

The impact of the cut will be evaluated before a decision
is taken to pass on the benefits to the air traveller -- this
was the common refrain of most airline executives contacted
for their reaction on the reduction in aviation turbine fuel
prices, bringing them at par with the price level of September
2007.

Welcoming the move as "good news", Air India Executive
Director Jitendra Bhargava said it should also be borne in
mind that when the prices were shooting up month after month,
the airlines were passing on "only part of the additional
financial liabilities".

"We will wait look at the economic viability before
any decision on reducing fares," he said.

Pointing out that the U.S. dollar had appreciated
significantly vis-a-vis the rupee, Bhargava said several major
cost-heads of an airline were dollar-denominated.

He said the passenger load factor had also declined due
to the global economic slowdown leading to less air travel.

A Kingfisher Airlines spokesperson said, "We will
evaluate the impact and then take a view" on lowering the
fares or the fuel surcharge.

As the peak winter travel season had just begun, the
carriers would utilise this opportunity to make food their
losses before they decide to slash fares, industry sources
said, adding that the fares could start coming down by January
and not before that.

Apart from A.T.F. price reduction, the government has
already allowed airlines to clear their outstanding of Rs
2,962 crore by March next year, extending the credit period to
90 days from 60 days. The A.T.F. prices are now revised
fortnightly, instead of the monthly as earlier.