Be Prepared: Airlines Likely To Increase Airfares By 10-15 Percent

News World India | 0
| October 2 , 2017 , 15:29 IST

Putting an end to a spree of low fares for flying, Airlines are expected to increase airfare rates by 10-15 percent as a result of an increase in prices of aviation turbine fuel (ATF) over the past few months coupled with a weakening value of rupee against the US dollar.

On Sunday, for the third consecutive month, the prices of ATF were increased by oil marketing companies by a significant 6 percent, as compared to last month when the price was hiked by 4 percent.

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While earlier the ATF cost Rs 50, 020 per kilolitre in Delhi, after the latest price increase, the ATF will now cost Rs 53,045, an increase of Rs 3,025.

Although no airline gave an official statement, airline sources said that as a result of the more expensive ATF and the weaker value of rupee, airlines have little option but to raise fares to avoid a 'Kingfisher-like' fate, referring to Vijay Mallya's Kingfisher Airlines which went bankrupt.

"We will take a decision shortly on fares. The operating cost has gone up substantially, and we have to pass on the same to flyers," an official of a full-service airline said.

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Apart from the operational costs, from August 1 the government has levied a regional connectivity cess of Rs 5,000 on each flight, an amount which is often transferred to the passengers.

Until recently, crude prices had been low, enabling airlines to offer passengers lower fares, leading to a growth of more than 20 percent in domestic air traffic for several consecutive months.