New Delhi: In a bad news for airlines and air travellers, state-run refiners today hiked the jet fuel prices. This has come even as carriers in the country have been struggling to reboot operations after extensive disruptions caused by the ongoing Covid pandemic. The move is expected to make air travel more expensive, further impacting demand, as per an IANS report.
- In the National capital, ATF prices for domestic airlines increased by 2.44 per cent from Rs 68,262.35 per kilo litre on July 1 to Rs 69,857.97 on July 16. In Mumbai too ATF rose from a level of Rs 66,482.90 per Kl to Rs 68,064.65 per Kl, IANS reported on Friday.
- Notably, hike in jet fuel prices by state-run refiners has a bearing on the operating costs of Indian carriers.
- Aviation turbine fuel (ATF) accounts for 35-50 per cent of the cost of running an airline in India, the IANS reported.
- ATF prices have risen close to 40 per cent since January this year from a level of just around Rs 50,000 per Kl at the beginning of the year to over Rs 70,000 per Kl now, IANS reported.
- Though airlines have the option of buying ATF abroad, but with curtailed international operation, this option has also limited benefits. And with passenger demand staying tepid amid the pandemic, it is difficult for airlines to pass on the entire cost increase to passengers, according to the IANS.
- An official of a budget carrier said that rising and the uncertain demand scenario will make airlines conservative on expanding capacity, especially on routes which have low demand, the IANS said.
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