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IATA welcomes India’s proposed ATF price stabilisation fund, citing extreme jet fuel price volatility.
IATA represents more than 370 airlines worldwide, including Air India, IndiGo, Air India Express and SpiceJet.
A senior executive of the International Air Transport Association (IATA) has welcomed the government’s decision to establish an Aviation Turbine Fuel (ATF) price stabilisation fund, describing it as an effective measure to shield domestic airlines from volatile fuel costs.
Speaking on the sidelines of the IATA AGM in Brazil, Hemant Mistry, Director Energy Transition at IATA, said the aviation industry is facing an extraordinary fuel-cost crisis, with jet fuel prices rising sharply despite a disconnect from crude oil prices.
“If the situation continues, there will have to be more demand destruction… that is the only way to manage the situation, it is an extreme situation,” he told PTI.
Demand destruction refers to airlines reducing flight operations as soaring fuel expenses make services less viable.
Jet Fuel Crisis May Force More Flight Cuts: Mistry
Highlighting recent trends, Mistry said jet fuel prices climbed from an average of USD 96 per barrel in November last year to USD 188 per barrel in April before easing to around USD 156 per barrel.
Commenting on India’s proposed ATF stabilisation fund of up to Rs 10,000 crore, he said, “The ATF price stabilisation fund is a very good solution to address the problem. It is a very good output from the government.”
IATA represents more than 370 airlines worldwide, including Air India, IndiGo, Air India Express and SpiceJet. The grouping accounts for around 85 per cent of the global air traffic.
The fund for Oil Marketing Companies (OMCs) would help provide ATF price stabilisation support to scheduled Indian airlines for their domestic and international operations.
With surging jet fuel prices as well as relatively lower demand, IndiGo, Air India and Air India Express have temporarily curtailed their networks, PTI reported.
Fuel Prices Remain Major Challenge For Airlines
Regarding the ATF price stabilisation fund, Sheldon Hee, Regional Vice President Asia Pacific at IATA, said any support that the industry gets from the government is welcome.
“We also recognise that there are different dynamics (for domestic airlines) that ensure connectivity between cities in the country.
“Our position is only that we would like the governments to appreciate the challenges that the industry faces as a whole and to consider policies that are supportive,” he said.
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