By Swati Khandelwal, CNBC-TV18

The Indian Oil Corporation or IOC has said that PSU oil companies have cut jet fuel prices by Rs 3239/kl on cut in customs duty, reports Newswire18.

It does bring some relief to the airline industry as there will less the burden of fuel on them but the airlines, CNBC-TV18 understands, are not ready and it is unlikely that they will bring the costs of on the tickets or fares down as the ATF (Air Turbine Fuel) price rise was 18.6% and the cut has been only 4.3%. Also, the State sales tax on ATF which is hovering at 50% in most states, even if that comes down, which the government is trying to convince all state governments - if it comes down to 4% or a 12.5%, even then the airlines say that they may not be able to bring the cost down on the tickets.   

Wolfgang Prock-Schauer, CEO, Jet Airways: You have to see, this industry made a loss of USD 1 billion in the last financial year. Now we have increased another USD 2 billion on cost, so there is the real danger that seems to see a USD 2 billion loss this financial year. So, if we get some relief, it will help closing the gap. But still there is lot of work to be done on the cost optimising our root network as talking about the industry perspective. To come to a break-even situation now, the question of lowering the prices is not on the table on my point of view.”

Even Kingfisher and SpiceJet – CNBC-TV18 spoke to both these airlines; they say that it is unlikely. In fact, what these airlines say is that this sort of a cut in ATF could perhaps help the consumers, as there will not be a further price hike in tickets. But there is nothing for now in terms of cutting on the prices of tickets.