Star Air cuts weekly flights on high fuel costs, says airline official
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Star Air has reduced its weekly flights by 15-20%, largely due to soaring Aviation Turbine Fuel prices. The airline is calling for a special fuel pricing strategy to support regional operators. This change is in response to increasing operational expenses caused by volatile fuel costs amid geopolitical tensions. Although the government had previously set up a Price Stabilisation Fund for airlines, it has since expired.
New Delhi: Regional airline Star Air has cut its weekly flights by 15-20 per cent, mainly due to higher ATF prices, and expects the government to introduce a special fuel pricing mechanism for regional carriers to cushion the impact of rising costs, according to a senior executive.Currently, Star Air has a fleet of eight Embraer regional planes.
Rising Aviation Turbine Fuel (ATF) prices, especially in the wake of the West Asia crisis, are significantly affecting airlines and pushing operational costs higher.
Against this backdrop, the executive said there could be a special fuel pricing mechanism for regional carriers, as they cannot pass higher prices on to passengers.
Regional carriers use just around 3 per cent of the total ATF, and a Price Stabilisation Fund (PSF) with better terms to deal with rising jet fuel prices would help, according to the executive.
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In the PSF, there could be a "lower deck... for airlines which operate specific routes under Udaan or something like that have a special pricing of X to maintain connectivity," the executive said.
To help airlines facing high ATF costs, the government earlier this year introduced the PSF scheme, which has now lapsed. The government is yet to take a call on coming out with the PSF scheme again.
Jet fuel costs account for around 40 per cent of an airline's operational expenses.
Meanwhile, the executive said that in the ongoing winter schedule, the airline has reduced the number of weekly flights by 15-20 per cent to 52.
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