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State oil marketing companies have cut jet fuel prices by over seven per cent from the October rate. Another had taken place in the month.
But there will be no immediate reduction in fares, airline executives have said.
The domestic aviation turbine fuel price is down to Rs 62,537 per kilolitre on Saturday, a drop of 7.3 per cent from the October rate (Rs 67,525 per kilolitre). However, with huge losses in last several months, airlines are not expected to pass on the price reduction benefit immediately.
Fuel costs account for 35-40 per cent of an airline’s operating expenses and domestic airlines pay higher for fuel than regional peers because of state and central levies. Centre for Asia Pacific Aviation expects domestic airlines to post collective loss of about Rs 2200 crore in second quarter.
“Fare reduction is unlikely as average fares are already very low. The aviation industry needs this kind of cost relief to get back to health. Reducing fares now would be unviable. We need to improve viability, not reduce it,'' said SpiceJet chief operating officer Sanjiv Kapoor. He added that the airline will keep offering limited period special offers to stimulate demand.
Air India too ruled out immediate reduction in fares while Jet Airways is in wait and watch mode. IndiGo and AirAsia remain guarded about their plans.
Travel industry too is not anticipating a fare cut now. “The airlines lost money in second quarter and in October the indications are that most of them have seen occupancy a bit lower than September. For a month that had both Diwali and Dussera that is disappointing,'' said Samyukth Sridharan, chief operating officer of online portal Cleartrip.
Airline executives say carriers are already bleeding under heavy input cost and scope for reduction in airfares is limited. “This reduction in fuel prices will provide some relief to airlines. If there is a further significant drop in fuel prices we can evaluate its effect on the fare structure,'' said Air India spokesperson.
“We always pass on benefits to passengers,'' said AirAsia India CEO Mittu Chandilya but did not disclose if the airline planned immediate fare cut. “Our focus is to keep our fares consistently low and we do manage to do that,'' added IndiGo president Aditya Ghosh.
While global crude oil prices fell 21% between June-September, the price of domestic aviation turbine fuel dropped 0.8% during this period. ATF prices were cut an additional 3%, effective October, bringing relief to airlines
Domestic airlines expect the fall in prices of aviation fuel to boost their earnings from the quarter ending December.
Air India to hire cabin crew
Air India has stepped up the recruitment of cabin crew as shortage of attendants has been resulting in flight delays.
Air India operates a mix of narrow body and wide body aircraft and has about 3,000 cabin crew. Over 2700 of them are available for duty and others are on long leave or grounded.
Over the past few weeks domestic flights have been getting delayed due to engine snags and crew shortage. With the airline's A320 aircraft getting grounded due to snags it pressed wide body Boeing 787s and Boeing 777s on domestic routes. But these aircraft require double the crew complement and putting together adequate number of cabin crew on each flight was turning into a nightmare for the airline executives.
“We have already hired 55 experienced cabin crew and their training is going on. We are also hiring 160 trainee cabin crew on contract. These would be available for operations from next summer schedule and will take care of immediate requirement. We are also making a hiring plan factoring future aircraft inductions, retirement and attrition,'' said a senior airline executive.
Air India has 17 Boeing 787s in service and will be inducting ten more planes of the type. It will also be leasing 15 A320 aircraft next year. However the hiring has not kept pace with inductions this year. The airline's human resources department too had reservations about large scale hiring but has now consented to the idea, sources said.
The national carrier has been facing a flak and the crew union members too have been complaining of safety violations as a result of inadequate crew deployment. A Right to Information Act response also raised questions regarding the airline's claims that it had secured a dispensation from the DGCA for an additional duty time for crew on Australia flights. Also reports pointed out that the airline has been forced to declare aircraft door non serviceable and offload passengers because of crew shortage.
Air India however has denied charges. “Air India strongly denies allegations in the media of violating safety standards and causing a safety risk to its passengers. We hereby assure our passengers that Air India follows all safety regulations laid down by the regulatory authority,'' the airline said in a statement earlier this week.
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