Only two out of all of India's airlines have been able to pay AAI dues on time. The airlines cannot survive with price wars and need to look at overhauling their flight plans and locations

With the continuing fall in international crude prices, the Oil companies have made a steep reduction in air turbine fuel (ATF) by 12.5%, reaching a cost of Rs52.4 per litre now. Flights to many cities in the north, particularly New Delhi, have been out of bounds due to intense fog and flights have been cancelled or delayed to ensure passenger safety.

It may be recalled that fuel pricing was deregulated way back in 2002 and this latest reduction is 6th in a series of cuts to make the operating cost of airlines a little lower than before. In fact, it is estimated, that fuel accounts for 40% to 50% of an airline's operating cost.

Though this is the lowest ATF rate in four years, airlines are not showing signs of reducing fares, because all of them have suffered prolonged cash crunches. Only Jet Airways and IndiGo have been able to meet their commitments, including the prompt payment of dues to Airport Authority of India.

To recap, Kingfisher is out of the running and down since 2012, SpiceJet has had to cancel flights due to "repossession" of the leased Boeing 737s for non-payment of rentals and some carriers have not been paying their airport dues on time.

In fact, the Airport Authority of India (AAI), who started the squeeze on SpiceJet, has now begun warning other airlines such as GoAir to bring their outstanding dues within Bank Guarantee levels. If not, they may be next in line to be put on "cash and carry" category. Such a move may not be applied on Air India, which owes Rs2,000 crore to AAI, all because they are a "government concern."

The only relaxation that was extended to SpiceJet, on government intervention, has been reported as "due to prospects of former promoter, Ajay Singh, showing interest to infuse some additional capital into the ailing airline.” As mentioned above, only Jet Airways and IndiGo have been paying AAI dues on time.

In order to ensure that passengers are not unduly taken for a ride by domestic carriers, the civil aviation ministry thought of fixing a fare cap of Rs20,000 for domestic sectors; for reasons unknown this has been kept in abeyance. But, in the meantime, airlines have increased the fares, as there is no guarantee that the crude oil prices will not fall further down or that, due to geo-political reasons go up north, all too suddenly.

Under these circumstances, it is in the interest of air travellers as well as domestic carriers that they restructure their flights in such a manner that each has a full occupancy and reduce the number of flights for same destinations in a given day so that they do not have too many empty seats to carry.

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)