Date:26/02/2007 URL: http://www.thehindubusinessline.com/2007/02/26/stories/2007022600870600.htm

Back IOC pumping up fuelling infrastructure at airports

V. Sajeev Kumar

The company has given orders for 40 additional bowzers for refuelling to meet the growing demand.

Riding on the boom in the air traffic in the country, Indian Oil Corporation Ltd is upgrading its infrastructure facilities it has created at various airports. This is to provide better service aircraft in supplying aviation fuel as the company controls over 97 airports out of 117 in the country. Indian Oil, with a share of 65 per cent of the aviation fuel market, is the major player both in civil and defence airports thereby meeting the requirements of 21 domestic, 64 international and 250 private airlines.

Between one sunrise and the next, Indian Oil refuels 1,400 aircraft — that is, one aircraft every minute somewhere in the country — a senior official of Indian Oil told Business Line on the sidelines of the International Aviation conference in Kochi.

Air Traffic

The aviation fuel business, he says, is growing at about 20 per cent, and this is expected to continue on account of the growth in the aviation industry. The setting up of extensive network of fuel supply infrastructure by several oil companies had also helped to achieve the surge in air traffic in the recent period that prompted airlines to fly to locations, hitherto, considered remote.

Given the growth in the sector, Indian Oil is upgrading its aviation operating service standards by entering into strategic tie-ups with international oil majors. Indian Oil has forged an alliance with Air BP, one of the largest aviation fuel companies in the world, for technology innovations. The aviation industry, he said, is moving towards a global bench. The customers are global and they demand the same standards everywhere. In this situation, the tie-ups with global companies would further help transfer significant learning in the business. Likewise, Indian Oil had a joint venture company AviOil Ltd in partnership with Nyco SA of France and Balmer Lawrie.

Indian Oil's safety and quality standards are also benchmarked to global partners. The company is trying to move towards hydrant refuelling system at pumps at airports, which allows flights to fuel faster.

Hydrant Refuelling

The system was recently commissioned at the Kolkata airport and is setting up a more advanced automated hydrant refuelling system at the Thiruvananthapuram airport. The facility will be ready in two months and with this, the Thiruvananthapuram airport will be the first airport in the country to have such facility.

In Chennai, he said, the company is laying a pipeline directly from the supply point to the aviation fuel station, not only to ensure speedy supplies, but also to eliminate truck movement. In anticipation of the airport upgrade programme, the company is leading a consortium of global infrastructure companies, such as Skytanking and Indian Oil Tanking Ltd, for setting up new generation facilities at the new Bangalore International Airport Ltd.

"In Mauritius, we are a part of the consortium of energy majors supplying aviation fuel to several international airlines. We have already achieved a market share of 25 per cent there and are also looking at African markets. Since we have a terminal facility in Mauritius, it is much easier to enter Africa," he said.

ATF Prices

Indian Oil is moving towards technology innovations. To become the least cost supplier, he said there is a need for getting advanced technology. The company has ordered for 40 new additional bowzers for refuelling schedule to meet the growing demand. Today ever more number of aircraft taking off and there is a need to keep pace with the airline industry. The company's philosophy in aviation is "least cost supplier to customer and no delay in service," he said.

The official also stressed the need for rationalisation of the sales tax structure by State governments to bring down the ATF prices. Various State governments are charging different types of taxes for ATF and there is a need for a uniform structure. Today, aviation fuel prices, which is linked to international crude oil prices, constitute 35 per cent of the operating cost of any aircraft. If the State governments decide to bring down the prices, it would help airlines operate more services at competitive rates, he added.

Apart from this, he hoped the airport modernisation programme and related infrastructure development taken up recently at several airports would help sustain the growth in the aviation sector in next few years.