The Indian Airlines must have rejoiced upon the allowance of 100% pre-COVID flight capacity by the government. This was due to the rising number of people getting vaccinated in the country. With this, the demand for air travel increased significantly. People are more confident to travel through domestic flights now.
But behind this good news, there’s one thing that will become a hindrance for the Indian travellers to travel in the same capacity they used to. The price of the air tickets is going to shoot up, and this won’t just be limited to an individual or a few airlines, but all of them.
According to an ET report citing an airline executive, the price of air turbine fuel (ATF) is going to go up. Increasing fuel price coupled with the depreciating rupee, airlines will have no option but to charge more from the customers to recover costs.
Jet Fuel Prices Have Soared Over 95.8% In the Last Year
As per the publication’s report, the price of jet fuel has increased by 95.8% in the last year. In fact, on Monday, the oil companies increased the price of the ATF by 13.9% compared to October.
According to Indian airlines, 40% of the operating costs is made of jet fuel which is one of the highest in the world. Due to the fuel getting more expensive, the cost of operating flights is going to be heavier for the airlines. The airlines will then be looking to recover their costs by charging more from the customers.
This will impact the aviation sector of the country. Low-cost airlines in the country require operating at very low costs so that they can maintain budget pricing for the customers. But with ATF going higher, the airlines can’t afford to go into losses and thus, they will be increasing the price of the tickets for domestic travel.