Without a 10 to 15 per cent increase in fares, it will be difficult for airlines to operate
New Delhi, Dt
Prices of Aviation Turbine Fuel (ATF) in India have reached an all-time high, which is likely to lead to a sharp rise in air fares in the coming days. Air fares have already skyrocketed due to rising jet fuel, which is now likely to rise further. Experts in the airline industry believe that after the price hike of ATF, air fares will increase by at least 10 to 12 per cent. The price of 1000 liters of ATF in Chennai is Rs. 1.5 lakh. Ajay Singh, chairman and managing director of SpiceJet, said that after the sharp rise in ATF prices and sharp depreciation of the rupee, domestic airlines had no choice but to increase air fares immediately. If the 10 to 15 per cent increase is not made, it will be difficult for the airlines to operate, he said. From now on, air travelers will have to pay more for air tickets. In 203, there has been a sharp increase in air fares. Air fares on some favorite routes have increased by 10 to 5 per cent in May. Airlines have suffered huge losses in the last few quarters. About 80 to 90 per cent of the cost of operating airlines in India is behind the ATF. As fuel becomes more expensive, so does its profit margin. Russia-Ukraine war has led to a sharp rise in ATF prices as Russian oil has run out of market. ATF prices have risen by more than 150 per cent since June 2021. This increase is not sustainable. In India, the central government should reduce the tax on ATFs as the tax rates in India are the highest, the expert said. Meanwhile, the Jharkhand government has decided to reduce VAT on ATFs. Earlier, ATF was subject to 50 per cent VAT. Instead, the VAT rate has been reduced to four per cent from now on.
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