New Delhi: Flyers have to shell out more for air tickets in coming days as prices of aviation turbine fuel (ATF) — or jet fuel — will be raised by 10 per cent in March. This comes at a time when airlines such as Jet Airways and IndiGo are cancelling flights, though for totally different reasons.
Airline officials say the combined effect will be cut supply of seats that may allow them to increase fares to absorb rising costs, says a Times of India report.
“ATF prices are up again by 10 per cent effective (March). Not good for already struggling industry!” AirAsia India COO Sanjay Kumar, an industry veteran, wrote on the micro-blogging site Twitter.
At present, the fuel in Delhi costs Rs 58,060 per kilolitre (Rs 58.06 per litre) and in Mumbai, it is priced at Rs 58,017 per kl. It may be noted that the Centre currently charges 14 per cent excise duty on ATF. On top of this, states charge up to 30 per cent sales tax or VAT.
Cash-strapped Jet Airways has grounded 19 aircraft in last one month due non-payment of lease rentals and for other reasons such as snags or awaiting spares. “An additional six aircraft have been grounded due to non-payment of amounts outstanding to lessors under their respective lease agreements,” the beleaguered said in a filing to the stock exchanges on Thursday.
IndiGo — India’s largest airline by market share — has curtailed flight operations till April because of pilot shortage.
“We need to charge fares that at least cover our costs if we have to avoid meeting the fate of Kingfisher or Jet. This is already being seen and fares are climbing up in the past few months, something that may accelerate after the sharp 10 per cent ATF price hike in March,” an airline official told the daily.
Many industry watchers are of the opinion that domestic carriers are struggling to turn a profit in the face of stiff competition and boiling oil prices.