Jet fuel was cut by Rs 169.3 in Delhi and by Rs 176 in Mumbai. The present cut in rates comes as a welcome relief to airline companies.
It maybe recalled that ATF rates were hiked by three times in the month of March. With crude at elevated levels, steep price of jet fuel has adversely affected the performance of airline companies.
In fact, jet fuel constitutes of over 40% of airline cost. Most of the airlines are saddled with huge debts and mounting losses, due to higher jet fuels costs and various other taxes.
All of the listed companies like Jet Airways, SpiceJet and Kingfisher Airlines have been saddled with losses.
In fact, Kingfisher Airlines is cash strapped and has also delayed salaries. Reports suggest that the company is looking at buyers to pick state in the company.