Due to the sharp rise in prices of aviation turbine fuel over the past two months, Indian Airlines have requested the civil aviation ministry has been requested for the increase on the cap on domestic fares. The prices of crude oil are expected to remain high due to the crisis between Russia & Ukraine.
Since 15 December in New Delhi, ATF prices have increased by 26.4% or Rs 19,508.25 per kilo-litre (kl). ATF is one of the biggest cost components for airlines.
On March 1, the latest increase of 3.22 percent on took ATF to Rs 93,530.66 per kl in the national capital.
Airfares To Increase For Tier-I & Regional Routes
By mid-March, experts as well as industry officials expect the airlines airfares on popular tier-I routes by 15-20 percent. On the regional routes, the hike will be 20-25 percent.
A senior airline official said “The airfare range for flying between Delhi and Mumbai is likely to rise from around Rs 2,300-13,000 currently to around Rs 2,900-15,000 by March”.
Price Hike Inevitable
An airline executive told that the price hikes are inevitable if the crude prices keep skyrocketing due to the ongoing crisis in Europe. For the domestic flights, most airlines are in talks with the government, regarding the airfare hike.
In the wake of the pandemic, as a temporary measure under the Aircraft Act, 1934 upper and lower airfare limits were set by the civil aviation ministry. In order to protect the interests of travelers and airlines, fare bands are revised time to time. In the year 2021, airfares were hiked as many as four times by the government.
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