New Delhi/Mumbai, June 5: Airlines today baulked at the prospect of fare revision following the cut in aviation turbine fuel (ATF) prices by oil marketing companies.

ATF prices were reduced around 4.2 per cent today after the government cut the customs duty on jet fuel to 5 per cent from 10 per cent yesterday.

Airline officials said the reduction was not sufficient to merit a cut in fuel surcharge, which was recently raised by Rs 300 for distances up to 750 kilometres and by Rs 550 for distances beyond that.

“We are evaluating the impact of the reduction in ATF prices, but a cut in fuel surcharge seems to be unlikely. We have had several increases in oil prices this year, and a reduction in air fares with merely a 4 per cent discount in ATF prices does not seem to be a good idea” Hitesh Patel,” executive vice-president, Kingfisher Airlines told The Telegraph.

Indian Oil Corporation today reduced ATF prices for domestic airlines to Rs 73,473.19 a kilolitre from Rs 76,625 in Kolkata; Rs 66,226.66 per kilolitre from Rs 69,227 in Delhi; Rs 68,626.89 per kilolitre from Rs 71,759 in Mumbai; and Rs 72,363.58 per kilolitre from Rs 75,602 in Chennai.

A Jet Airways spokesperson said that after the steep rise in ATF prices on June 1, today’s cut was too minuscule to make any impact on an airline’s costs.

Budget carriers GoAir and IndiGo also said that there would be no decrease in fuel surcharge on air fares as they had not increased fares when ATF prices rose at the beginning of this month.

“We did not increase the fuel surcharge and, therefore, the question of reduction does not arise,” said G.P. Gupta, chief financial officer of GoAir.

High fuel prices are expected to push airlines deeper into the red, with industry losses for the 2008-09 fiscal expected to double to Rs 8,000 crore.

Apart from measures such as refuelling at states where ATF is cheaper, airlines such as SpiceJet and IndiGo have renewed their efforts to fly on international routes.

Airlines said that international operations would lead to better utilisation of aircraft as well as cost efficiency in jet fuel which is 75 per cent cheaper abroad.

The airlines informed the civil aviation ministry yesterday that they would have no option but to prune domestic capacity by 20 per cent.

Prices of crude oil, which almost have a direct impact on jet fuel prices, increased about 11 per cent over the last month.

The oil marketing companies revise jet fuel prices every month-end after assessing the global trend in crude oil prices. ATF accounts for 40-50 per cent of airlines’ operating expenses.

“The airlines are reeling under huge losses, and a discount of 4 per cent is negligible to offload the losses suffered so far. However, the condition will improve marginally and should boost the sentiment of the carriers to some extent,” an aviation analyst said.

From February 2007 to June 1 this year, ATF prices were raised four times.

At the time of the June hike, civil aviation minister Praful Patel had said, “We are extremely unhappy over the aviation turbine fuel price rise and are taking a serious note of it.”

The minister had said he would meet Prime Minister Manmohan Singh soon to discuss a bailout package for the carriers.

Air travel is now no more a luxury but a necessity, and the hike would have a cascading impact, Patel had said.