SpiceJet says no plans to cut air fares; shares up

Tag : jet fuel
NEW DELHI: Low-cost carrier SpiceJet Ltd said it does not plan tocut air fares even as jet fuel prices in the domestic market wereslashed by 16 per cent from Monday.

Shares of SpiceJet, which has a tenth of India's domestic passengermarket, rose more than 6 per cent to Rs 29 and were trading at Rs27.85 at 12.06 pm while the benchmark BSE index was down 1.9 percent.

SpiceJet's rival Deccan Aviation was up 5.2 per cent and JetAirways was up 4.1 per cent. "We need at least 2-3 months ofstability of prices before we go back and revise.

As of today, we are not doing anything," Partha Sarathi Basu toldReuters over the telephone. State-run Indian Oil Corp cut domesticjet fuel prices by 16 per cent with effect from Monday asinternational crude oil prices have fallen by a fifth from anall-time high of over $147 a barrel in mid-July.

Domestic jet fuel prices, among the most expensive globally due tohigh-level of taxes, constitute up to 45 per cent of an airline'soperating costs and are more than 56 per cent up from Septemberlast year.

SpiceJet on Friday said it posted a Rs 102 crores loss for theApril-June quarter hurt by high jet fuel prices. Centre for AsiaPacific Aviation (CAPA) said July-September would be the worstquarter in the financial year for all airlines due to low passengertraffic and high costs of operation.

"Airlines would do wise not to reduce the fares but continue tolook at dynamic fare regime, which allows some bucket of lowerfares in the market place," Kapil Kaul, CAPA's chief executiveofficer, Indian subcontinent and Middle East, said over thetelephone.

SpiceJet's Basu said he expects the load factor, a measure offilling planes, which dropped to 61 per cent in August from 70 percent a year ago, to pick up in the coming festival months ofOctober and November. "Next three months is the season for us. Weexpect the load to be back to 70 per cent," he said.