Ailing Kingfisher Airlines, has got the nod from the Directorate General of Foreign Trade (DGFT) to directly import aviation turbine fuel. This move can help the cash strapped airline to cut the operating costs by ten percent.
The other budget airline SpiceJet has already received the permission from DGFT to directly import aviation turbine fuel, but the government based airline Air India is still looking forward to directly import fuel. Kingfisher in a statement said, “Kingfisher Airlines has received authorisation from the DGFT for the import of aviation turbine fuel on 11th April, 2012 and we are taking active steps to initiate the process of aviation turbine fuel import”.
The turbine fuel for the aviation forms almost 50 percent of the overall operation cost. The airline was allowed to import aviation turbine fuel directly in the month of February to help the cash strapped airline.
On the other hand the analysts are sceptical about the lack of infrastructure for storage as well as delivery by the different airline companies. Such a process can require an initial investment by the domestic airlines. The aviation turbine fuel was earlier sourced from the oil marketing companies which requires the airlines an additional state specific taxes.