Indian Airlines plans to hedge fuel costs

Indian Airlines is planning to start hedging its international fuel purchase in the wake of spiralling aviation turbine fuel (ATF) cost that is eating into its profits. Currently, the annual fuel bill of the airline is around Rs 1,500 crore.

Sources close to the development said Citigroup has made a detailed presentation before Indian Airlines as a preliminary step towards hedging.

“International Air Transport Association (IATA) has also made a similar presentation as a prelude to the fuel hedging for this PSU airlines,” they said.———-
Surcharge cut may not benefit passengers soon

Following a reduction in the price of aviation turbine fuel (ATF), most airlines are adopting a wait-and-watch policy before taking a call on whether to pass on some quantum of the drop to passengers.

Though Delhi-based low-cost carrier SpiceJet announced a 50% reduction in fuel surcharge, legacy carriers such as Jet Airways, Indian Airlines and Air Sahara are unlikely to drop fares immediately to help cushion a part of the fog-related costs due to higher fuel burn, flight disruptions and cancellations over the next couple of months.

Reacting to the ATF price cut, SpiceJet announced that it would slash fuel surcharge by 50%. From December 1, fuel surcharge for long-haul destinations will be Rs 200, as against Rs 400 earlier, while for any travel less than 1,000 km, the surcharge will be Rs 100.

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