SpiceJet to be the First to Use Imported Jet Fuel

Thursday, 7th June 2012 at 05:24am

SpiceJet, the nation's third largest airline by market share, is set to take delivery, by early July, of the initial shipment of aviation fuel which it imports directly from abroad.

According to its Chief Executive Neil Mills, the airline is taking advantage of this arrangement and they are expecting the shipment as early as July this year. He added that they are the first airline company to do such move.

The director general of foreign trade as well as the apex government authority on exports and imports consented to the airline's importation of its aviation fuel needs, making them the first airline company to import directly from the source.

As early as February this year, all airlines were allowed to import fuel as part of their cost-saving measures to allay further losses. These airlines are set to lose $2 billion this year if they would not be able to import fuel directly.

It said that fuel costs contribute significantly to the airline's overall operating costs annually. With the importation program, they would be able to save of millions of dollars. SpiceJet has seen its fuel bills rocketing up to 55 percent in the last quarter of last year. That figure is expected to climb up to 64 percent for fiscal year 2012 alone.

The airline did not divulge, though, to whom they are tying up with for the importation of its aviation fuel including logistics and storage facilities.

Despite the sagging performance of the airline in terms of profitability, Neil Mills is hopeful though that his company is going towards the direction of strong recovery by the middle of this year. He cited the falling crude prices in the market this year from $116 per barrel during the first quarter of 2012 to $106-107 a barrel today.

By: Pete Lee.