Iranian airline makes $16 million loss as dollar fluctuates

Business Materials 28 September 2012 14:09 (UTC +04:00)

Azerbaijan, Baku, Sep.28/ Trend F.Milad/

Iran's Airtour passenger airline has suffered a 200 billion rials (some $16 million) loss as the administration will no longer provide the airline with the dollar at reference rate of 12,260 rials, the managing director of the airline stated.

The airline cancelled all its international and tourist flights, Sirous Baheri added, ILNA reported.

As the administration does not provide the airline with an official rate dollar, the airline has to pay costs based on the free market dollar, he noted.

Seyed Abdolreza Mousavi, who heads the Association of Iranian Airlines, has said that until late June of last year, aviation fuel cost 1000 rials and since then it has been 2000 rials (Iran's official exchange rate is 12,260 rials to the dollar).

The National Iranian Oil Production and Distribution Company however charges 4000 rials for the fuel it sells the airlines, an amount says Mr. Mousavi, the airline association never agreed to.

It would be impossible for the airlines to pay 4000 rials for fuel when the public pays for tickets that are based on a 2000 rial fuel rate and until ticket prices go up, the NIOPDC has to keep fuel rates the same, said the association chief. The airlines he added don't have the money to pay the NIOPDC's bill.