Direct import of aviation turbine fuel (ATF) may not result in any substantial benefit to the operator, says Mr Giorgio De Roni, Chief Executive Officer of GoAir.
Logistics issues
Considering the logistics issues such as safe transportation and other infrastructure bottlenecks, it may at best result in small savings - may be in small two-digit percentage, “but not to the extent of 20 per cent”, he said.
Precautions
It calls for a lot of precautions. ATF is a very sophisticated product and prone for deterioration, which is a safety concern. It is not easy to find a solution to this.
Besides, it also calls for investment. The industry needs to figure out a sustainable model within the legal framework.
However, as fuel represents more than 50 per cent of the operating cost, GoAir too is in the process of application for ATF imports.
But, the company is not in favour of making new investments for the purpose.
It is in talks with various parties on this, Mr Roni said, adding, “We just need the fuel at competitive rates and the end result should be to achieve cheaper cost of fuel in line with other countries.”
On hedging, he said the company is not involved in hedging activity as it generally produces very good or very bad results.
Some carriers were able to gain substantially, and some other important carriers who hedged incurred huge losses.
In the current geopolitical situation in West Asia, it may not be advisable to hedge.
“So, in my view, hedging is a sort of gambling, and I am not in the gamble,” he said.
Besides, he said the company is in talks with “a couple of big players” in Europe to tie up with for aircraft maintenance and spare parts supplies.
Given the growing scale of its operations, GoAir believes it is important to tie up with some big players to ensure availability of spare parts on time.