Significant decline in fuel usage of Iran's airlines

Baku, Azerbaijan, Dec.18

By Dalga Khatinoglu - Trend:

Iran supplied airlines with 1.05 billion liters of fuel during the last nine months, head of the Civil Aviation Refueling Department Ali Harandi said Dec.18 that from the beginning of current fiscal year (March 21), 945 million liters of fuel was delivered to domestic airplanes, while 105 million liters to foreign airplanes.

He didn't mentioned the figures for the same period last year, but explained that the number of fuelling operations decreased from 189, 337 to 145,217 cases, which indicate a 23 percent decline during last nine months compared to the same period in the previous year, Shana reported.

Harandi said the fuel consumption rate of airplanes has been optimized during the current year and this caused the declining fuel usage.

However, Iran's Fars news agency reported Dec. 10 that Iranian airlines owe some 8 trillion rials (about $297 million based on official rate of 26,933 rials per each USD) to the National Iranian Oil Refining and Distribution Company (NIORDC). The figure indicates an increase by 60 percent compared the beginning of current Iranian fiscal year (March 21).

The airlines even refuse to open line of credit (LC) to pay the debts, according to the report.

Iranian airlines and oil ministry have frequent disagreements over the fuel price.

The airlines refuse to accept the jet fuel price announced by oil ministry, saying the airplane ticket prices are not commensurate with the fuel price.

After launching the Subsidy Reform Plan, the administration sharply increased jet fuel price for domestic passenger airlines.

The subsidy reform plan, launched in December 2010, allows the Iranian government to gradually slash subsidies on fuel, electricity, and certain goods over the course of five years.

Earlier the head of the association of Iranian airlines, Abdolreza Mousavi said that Iranian airlines are unable to pay off their fuel debts to the Oil Ministry due to their difficult financial position.

Many of the national fleet planes have been grounded due to financial problems, he said, adding that spare parts and components are purchased from second-hand sources due to international sanctions with great difficulty.

Dalga Khatinoglu is an expert on Iran's energy sector, head of Trend Agency's Iran news service
Follow him on @dalgakhatinoglu

Edited by CN

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