On Tuesday, Indian Aviation Ministry approved a plan that authorizes Indian carriers to import jet fuel directly, which is believed to help the cash-starved carriers to cut fuel costs by up to 20 percent.
A big relief for Indian carriers, the decision is also going to benefit the travellers by way of cheap ticket deals on international flights to India and domestic flights within. Although not likely to happen sooner, it is sure that it will be a welcoming step for the holiday makers as well as those who frequently travel to India.
Fuel costs make for the biggest lump of the tickets pricing and remain a deciding factor in terms of an airlines’ ability or inability to offer cheap flights.
At present, Indian airlines can only buy jet fuel from oil marketing companies including some government controlled firms that are mandated to levy different federal and state taxes raising the fuel price manifold. No surprise that the jet fuel prices in India rank amongst the highest in the world.
Jet Airways, popular choice of passengers booking flights to India, has shown interest in seeking help from oil companies to import jet fuel.
The authorization to allow direct fuel imports is likely to reduce costs by 15 to 20 percent. However, the authorization announced to import fuel directly is still pending approval from the cabinet and requires buy-in from lenders.
In another development in the Indian aviation sector, the government panel is soon going to pass its recommendation to the cabinet to allow participation of foreign airlines to buy up to 49 percent of Indian airlines.
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