The sharp increase in jet fuel prices since August this year could lead to air ticket prices going up by as much as 15 per cent. Airlines are learnt to be readying for a sharp hike in ticket prices after the spike in Aviation Turbine Fuel (ATF), with the latest being on Sunday when oil marketing companies raised prices by 6 per cent.
After the third consecutive monthly hike, ATF will now cost Rs 53,045 per kilolitre in Delhi, up Rs 3,025 per kl from Rs 50,020. The price was increased by 4 per cent last month.
Airlines are facing the twin impact of rising fuel prices and the weakening value of the rupee against the dollar. Besides this, the government has also started levying a regional connectivity cess of Rs 5,000 on all flights from August 1. While most airlines have transferred this cost to passengers, they fear running out of options to avoid the cost on the consumer.
Low crude prices till recently had enabled airlines to offer low-fare air travel to passengers, leading to over 20 per cent growth in domestic air traffic for several months in a row till this summer.
On Sunday, OMCs hiked jet fuel price by a steep 6 per cent on firming international rates, the third straight increase in rates since August.
ATF will now cost Rs 53,045 per kilolitre (kl) in Delhi, Rs 3,025 per kl more than Rs 50,020 previously, according to a price hike notification by Indian Oil Corp, the nation's biggest fuel retailer. This is the third consecutive monthly hike in ATF price, the last being by 4 per cent (Rs 1,910 per kl) on September 1.
