The prices of Aviation Turbine Fuel (ATF) have fallen by 3.27 per cent in October. This comes as a slight relief to the domestic aviation industry, after the sharp 7.5 per cent jump in September.

The price of ATF for the current month is Rs 20,700 per kilolitre. Aviation industry experts, however, pointed out that this decrease would not make a major difference in fuel costs of the airlines.

A senior executive of a domestic carrier said, "Although we welcome the reduction, we would wait for November since the ATF prices worldwide tend to spiral in the winter months."

Airline sources said the drop in ATF would not have any effect on the fuel bill if the prices go up slightly even in November.

Last month's 7.5 per cent hike in ATF had added approximately Rs 75 crore (Rs 750 million) to fuel bills of the airlines. In fact, September witnessed the sharpest increase in ATF prices for the current financial year when it touched Rs 21,400 per kilolitre.

The current financial year began with a 3.96 per cent decrease in the prices and April witnessed a price of Rs 24,200 per kilolitre.

May saw a 19.42 per cent drop which took the price to Rs 19,500 per kilolitre. The hikes in July and August were a minor 1.03 per cent and 1.5 per cent respectively.

The ATF price increased significantly by 12 per cent in March 2003 to touch an all time high of Rs 25,200 per kilolitre.

This resulted in a 15 per cent hike in air fares by all the three domestic carriers. Fuel costs account for 30 per cent of the operating expenses for domestic airlines and around 28 to 32 per cent of the air fare.