Mumbai (PTI): National air carrier Air India would like to see international crude prices stabilise at a reasonable level before taking a call on reduction in its air fares, a top company official said.

"At this moment, I don't envisage any reduction in fares. It will happen only when international crude prices get stabilised at a reasonable level," National Aviation Company of India Ltd (NACIL) Chairman and Managing Director Raghu Menon told reporters here on the sidelines of a function held on the the 104th birth anniversary of JRD Tata.

Menon said the drop in prices has been much less significant than the rise (in ATF prices).

"It is just two months and the drop has been fairly marginal compared to the increase that happened continuously for five months," he said.

According to Menon, high fares would not cause any decline in demand during the festival season.

"Demand will be there...how much is, however, difficult to figure out," he said.

The country's aviation industry could post losses to the tune of Rs 8,000-10,000 crore in the current financial year due to the high ATF prices between April-August this year, he said.

The industry was passing only 30-40 per cent of the rise in the ATF prices onto customers while the remaining 60 per cent increase was being borne by the airlines themselves, Menon said, adding that "Currently, our fuel bill accounts for 50 per cent of total operating cost, compared to 20 per cent in 2001."

"If we pass on 100 per cent of the increase to passengers, then we will have to ground our aircraft as no passenger will fly them," Menon said.