Air fares may soar as oil cos raise ATF price

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Despite the sharp increase in crude oil prices in the international market, the oil marketings may not have increased made petrol and diesel prices, but have increased the prices of aviation turbine fuel (ATF) by 5%. This may result in air fares becoming more expensive this festive season. ATF accounts for almost 40 percent of the cost of operating flights for aviation companies. In such a situation, expensive ATF makes the operation of air flights expensive.

After the recent increase, ATF prices have reached their highest level in 10 months. After the latest price hike, prices have increased by 32 percent since June. The price of ATF in Delhi has gone up to Rs 1.18 lakh per thousand litre, while in Mumbai the price is Rs 1.10 lakh, in Kolkata Rs 1.26 lakh and in Chennai it is Rs 1.22 lakh per litre.

This year, there has been a sharp rise in the prices of crude oil in the international market; the price has increased by about 28 percent in the September quarter alone. At the end of June, the price of crude oil in the international market was below $75 per barrel, which reached above $95 per barrel at the end of September. Along with expensive crude, there is also a huge fall in the rupee in the domestic market, due to which the oil companies’ cost of importing oil has increased and they have had to increase the prices of aviation fuel.

Due to expensive air fuel, the burden on aviation companies has also increased and by increasing air fares they can pass this burden on the customers. The demand for air flights has increased in the country since Corona, but on the other hand, in the absence of Go First and Jet Airways, the supply of air seats is limited. In such a situation, the air companies which are currently operating flights can increase the fares sharply.