Kingfisher Airlines has started the process of importing aviation fuel, the company said, a move that could help the cash-strapped carrier drive down fuel bill but present substantial and costly logistical challenges.
High fuel price is only one of the issues plaguing India's ailing airline industry, but a recent decision to allow import of jet fuel by airlines was no panacea due to the high costs involved in setting up storage and supply infrastructure.
In February the government gave the green signal for the direct import of aviation turbine fuel (ATF), following a long-standing demand from carriers forced to buy fuel more than 50 per cent costlier than the global average, largely due to local taxes.
"Kingfisher Airlines has received authorisation from the Director General of Foreign Trade for the import of aviation turbine fuel ... and we are taking active steps to initiate the process of ATF import," the company said in a statement.
SpiceJet Ltd, another airline, said yesterday that it had received approval to begin direct ATF imports, which accounted for around half of Indian carriers' operating costs.
Debt-laden Kingfisher, had slashed its services with banks refusing to extend loans to the carrier. The carrier had become a byword for the troubled industry, which is expected to have lost up to $3 billion in the fiscal year that ended in March, the Centre for Asia Pacific Aviation said.