The sharp increase in aviation turbine fuel (ATF) prices and the depreciation of the rupee have left the domestic airlines with no choice but to immediately raise airfares, said Ajay Singh, Chairman and Managing Director, SpiceJet, on Thursday.
A minimum 10-15 per cent increase in air fares is required to ensure that cost of operations are better sustained, Singh said in a statement.
"ATF prices have increased by more than 120 per cent since June 2021. This massive increase is not sustainable and governments, central and state, need to take urgent action to reduce taxes on ATF that are amongst the highest in the world," he said.
SpiceJet has in the last few months tried to absorb as much burden of this fuel price rise, which constitutes more than 50 per cent of our operational cost, as we could, he said.
"The weakening of the Indian rupee against the US dollar further significantly impacts airlines as our substantial cost is either dollar denominated or pegged to the dollar."
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