Air travel in India is on the brink of becoming more expensive as aviation turbine fuel (ATF) prices witness another hike. Government oil firms Bharat Petroleum (BPCL), Indian Oil (IOC), and Hindustan Petroleum (HPCL) have increased ATF prices by ₹ 1,318 per kilolitre, effective immediately. This comes just a month after a ₹ 2,941.5 hike, marking a sharp rise in operational costs for airlines.
Rising ATF Costs Impact Airfares
Steep ATF Price Surge
ATF prices in major cities have soared to ₹ 91,856.84 per kilolitre in Delhi, ₹ 94,551.63 in Kolkata, ₹ 85,861.02 in Mumbai, and ₹ 95,231.49 in Chennai. These revised rates have hit the aviation industry hard, as fuel constitutes the second-largest operational cost for airlines, after labor expenses. The consistent increase in ATF prices pressures profit margins, leaving airlines little choice but to pass the burden onto passengers through higher ticket prices.
Monthly Revisions Add to Challenges
ATF prices are reviewed monthly, and while there were reductions in September and October, recent months have seen consecutive hikes. This unpredictable fluctuation poses challenges for airlines in managing costs and maintaining competitive ticket pricing.
Commercial LPG Rates Also on the Rise
In addition to ATF, commercial LPG prices have also been increased for the fifth consecutive month. A 19-kg cylinder now costs ₹ 1,818.50 in Delhi, ₹ 1,771 in Mumbai, ₹ 1,927 in Kolkata, and ₹ 1,980 in Chennai. Over the past five months, LPG prices have risen by ₹ 172.5, impacting industries such as hospitality and food services. Meanwhile, domestic LPG prices remain unchanged at ₹ 803 per 14.2-kg cylinder.
Conclusion
The rising cost of aviation fuel is a blow to the aviation sector and passengers alike, as higher airfares loom large. With operational costs climbing, airlines are likely to adjust ticket prices to stay afloat. The trend also highlights the broader inflationary impact on other sectors, such as hospitality, driven by increasing fuel and LPG rates. Travelers and businesses must brace for this financial strain in the coming months.
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