Spike in technical landings from Sri Lanka flights boosts ATF sales of Indian OMCs

The president of Sri Lanka fled the country early on July 13, slipping away in the middle of the night only hours before he was to step down amid a devastating economic crisis that has triggered severe shortages of food and fuel. (Image: AP)

Oil marketing companies (OMCs) such as Bharat Petroleum Corporation Ltd (BPCL), Indian Oil Corporation Ltd (IOCL) and Hindustan Petroleum Corporation Ltd (HPCL) have witnessed a spike in demand for Aviation Turbine Fuel (ATF) at south India-based airports, as airlines with flights to and from Sri Lanka are making a pit stop for refueling.

Since the beginning of July, airlines operating in Sri Lanka have been making ‘technical landings’ at airports in south India, primarily to refuel due to the shortage of fuel in the island nation which is facing an economic and political crisis. Sri Lankan Airlines, Air Arabia, Jazeera Airways, Gulf Air, among others, are making an unexpected touchdown to buy fuel at airports at Indian cities like Kochi, Chennai and Thiruvananthapuram. 

The so-called ‘technical landings’ refers to a landing where no unloading of passengers or luggage occurs. This additional demand for ATF at a time when they are selling at record high prices will boost revenue of the OMCs at a time when they are booking losses on the retail sale of fuel. These OMCs have consistently increased the price of fuel sold to bulk consumers and for aviation turbines in line with international crude oil prices but they had left retail prices unchanged for almost 137 days until March 22 even though crude oil prices had risen sharply.

“We have been refueling Sri Lankan Airlines for some time now. Since July 4th, Air Arabia and Gulf Air flights from Colombo have also started buying fuel from us at Trivandrum; they are together buying around 30,000-40,000 litres per day,” a BPCL spokesperson told Moneycontrol.

BPCL had earlier shared on July 7 that it was supporting SriLankan Airlines for refueling for long haul flights and had thus far supplied fuel to 100 flights at Trivandrum, Chennai and Kochi. 

An official from IOCL also confirmed that the company has been refueling Jazeera Airways flights. Industry sources said that all the state-run and private OMC are looking at these flights as an opportunity to boost sales but the companies did not respond to Moneycontrol’s query asking for more details on sales volume. 

Union Minister of Civil Aviation Jyotiraditya Scindia took to social media on July 13 to congratulate Trivandrum and Kochi airports for serving these Sri Lanka flights. “The airports have gone beyond their call of duty by allowing technical landing to 120+ aircraft bound for Sri Lanka. The gesture will go a long way in furthering ties with our neighbour,” he said. 

SriLankan Airlines has been using Indian airports for refueling for over a month. According to Flightradar24, the Swedish internet-based service for real-time aircraft flight tracking information, one flight each of Air Arabia and Gulf Air has been making a stop at Trivandrum for refueling. Flights of Air Arabia. AirAsia, and Jazeera have been making technical landings at Kochi.     

These technical landings are also a source of revenue for airport operators. Industry experts believe Indian OMCs will benefit from higher demand for ATF from these flights, which could boost their revenue in the current quarter but a significant surge in demand is unlikely as airlines are calibrating flights to the country. 

The economic crisis in Sri Lanka hurt its fuel supplies and the aviation industry was among the first to be impacted. Airlines have been changing schedules and have had to pay more for fuel in order to keep running flights. 

Sri Lanka's embattled President Gotabaya Rajapaksa on Thursday left the Maldives for Singapore after fleeing his country amid an economic crisis. While the Sri Lankan government is in talks with the International Monetary Fund (IMF) to rescue the country's economy, sources told Moneycontrol that India has assured help regarding food.