Aviation fuel cost gets cheaper by over Rs 8,000! Guess what Vijay Mallya has blamed for Indian airlines distress?
Boiling crude oil prices have given sleepless nights to these airlines, as their fuel purchase has taken a chunk out of their profits.
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When poster boys turn rogue! India Inc developments that surprised, shocked everyone in 2018: Once the 'king of good times', Vijay Mallya, has spoken openly about Indian airlines ongoing distress. Mallya has tweeted about the financial distress in aviation industry and blamed it all squarely on higher aviation turbine fuel (ATF) fuel prices. Currently, the Indian airlines are burning through massive amounts of money, which has resulted in a weak September 2018 quarterly results. There are three airlines that have major market share in India namely, Indigo, Jet Airways and SpiceJet. Other known airlines are GoAir, Vistara and Air India. Boiling crude oil prices have given sleepless nights to these airlines, as their fuel purchase has taken a chunk out of their profits.
Even though Indigo is better placed compared to other two Jet Airways and SpiceJet, yet fuel cost has been a major cause of concern. While the story of Jet Airways is travelling in continuous mayday as the airline faces cash crunch due to hefty fuel expenses, rental leases and debt maturing this year. While the other ones have also blamed ATF cost for their low profit this year.
Mallya tweeted saying, "Airlines struggling financially partly becoz of high ATF prices."
Airlines struggling financially partly becoz of high ATF prices. Kingfisher was a fab airline that faced the highest ever crude prices of $ 140/barrel. Losses mounted and that’s where Banks money went.I have offered to repay 100 % of the Principal amount to them. Please take it.
— Vijay Mallya (@TheVijayMallya) December 5, 2018
While talking about the ATF cost, Mallya did not shy away in boasting about his ex-Kingfisher Airlines and the feud with banks.
Mally says, "Kingfisher was a fab airline that faced the highest ever crude prices of $ 140/barrel. Losses mounted and that’s where Banks money went. I have offered to repay 100 % of the Principal amount to them."
Adding he says, "For three decades running India’s largest alcoholic beverage group, we contributed thousands of crores to the State exchequers. Kingfisher Airlines also contributed handsomely to the States. Sad loss of the finest Airline but still I offer to pay Banks so no loss. Please take it."
For three decades running India’s largest alcoholic beverage group, we contributed thousands of crores to the State exchequers. Kingfisher Airlines also contributed handsomely to the States. Sad loss of the finest Airline but still I offer to pay Banks so no loss. Please take it.
— Vijay Mallya (@TheVijayMallya) December 5, 2018
Mallya has taken shelter in United Kingdom, after he was called defaulter by a consortium of banks for defaulting in over Rs 9,000 crore debt.
But while Mallya blames the ATF cost, it needs to be noted that this month airline fuel cost have come down quite drastically in line with other fuel purchases.
From December month, airline are now paying ATF prices of Rs 68,050.97 in Delhi compared to previous month price of Rs 76,378.80. In Kolkata, the ATF price this month is at Rs 73,393.55 compared to previous month of Rs 81,441.06.
In case of Mumbai, airlines are buying fuel at Rs 67,979.58 from this month compared to November month where price stood at Rs 76,013.20.
Not only this even, Chennai has seen price cut in ATF as now airline purchases fuel at Rs 69,216.61 compared to November month's 77,521.63.
From the above, the ATF prices are now down by over Rs 8,000.