Airlines in trouble as Indian Oil raises jet fuel prices by 4%

Key Highlights: 

• Indian oil increases jet prices by nearly 4% for domestic airlines
• Over 4% hike made in ATF prices for international airlines
• ATF prices increased by 11% in FY17

State-owned Indian Oil on Friday increased aviation turbine fuel (ATF) prices by nearly 4% with immediate effect. 

Jet fuel prices are usually decided by Indian Oil in the start of every month in four metro cities namely New Delhi, Mumbai, Kolkata and Chennai. 

From September 01, 2017, now airlines will be charged ATF prices of Rs 50,020 per litre in New Delhi, Rs 49,383 per litre in Mumbai, Rs 54,416 per litre in Kolkata and Rs 52,740 per litre in Chennai. 

Highest increase was made in Mumbai and Chennai at Rs 1,924 and Rs 1,956 per litre, respectively. Meanwhile, in New Delhi and Kolkata fuel prices were hiked by Rs 1,910 and Rs 1,881 per litre. 

For international airlines, ATF is set at $552 per litre in New Delhi, $560 in Mumbai, $597 in Kolkata and $561 in Chennai.

The aviation turbine fuel (ATF) prices has increased 38% year-on-year and 11% quarter-on-quarter (QoQ) basis in fourth quarter ended March 31, 2017, as per ICICI Securities. 

For airlines operating in India, ATF, lease rentals, maintenance and employee benefit expenses account for over 70% of their cost.

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