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Jet fuel is the biggest expense for airlines. Its share in total operating expenses is 40%.
After the recent increase in the prices of Aviation Turbine Fuel (ATF), many airlines have increased the fuel surcharge. In view of the increasing burden on passengers, the Central Government is now preparing to intervene in this matter.
According to a report by NDTV, the government may soon hold a meeting with the airlines so that the common people can get relief from expensive travel.
The government has not yet issued any written instructions, but clarification is being sought from the airlines regarding their pricing strategy.
Officials say the main objective of the government is to ensure that passenger fares do not increase.
Prices increased by 8.5% on domestic flights and doubled on international flights
ATF prices were recently increased deliberately. The government had allowed a total increase of 25% in prices to support the aviation sector. However, to provide relief to common passengers, the effective increase for domestic operations was limited to around 8.5%.
At the same time, the prices of ATF for international operations and chartered flights have almost doubled. It has increased from Rs 96,638.14 per kiloliter to Rs 2,07,341.22 per kiloliter. The price of domestic ATF has now reached Rs 1,04,927.18 per kilolitre.
ATF price changes
| category | Old price (₹ per kilolitre) | New price (₹ per kiloliter) | shift |
| International ATF | ₹96,638 | ₹2,07,341 | +114% |
| Domestic ATF | ₹96,638 | ₹1,04,927 | +8.5% |
Indigo increased fuel surcharge by Rs 10 thousand
Even though the government tried to keep the burden low at the domestic level, the country’s largest airline IndiGo changed the fuel surcharge. IndiGo has now implemented a new distance-based structure by removing the earlier flat surcharge of Rs 425.
Domestic Routes: Now fuel surcharge ranging from Rs 275 to Rs 950 will be levied depending on the distance. This is a relief for short distance flights, but long distance domestic flights have become expensive.
International Routes: It has been affected the most here. Indigo has increased fuel surcharge by up to Rs 10,000 on long-haul routes like Europe. These new rates have come into effect from April 2.
Jet fuel accounts for 40% of airlines’ costs
Aviation sector experts say that fuel accounts for about 40% of the total operating cost of any airline. In such a situation, even a minor change in ATF prices has a direct impact on the profits of airlines. Airlines argue that due to rising costs they are forced to pass this burden on to passengers.
Will fares be reduced due to government intervention?
Market experts believe that after the intervention of the Central Government, airlines may have to reconsider their increased surcharge. The government wants the airlines not to put the entire burden on the customers, but to adjust it gradually. If the talks are successful, then surcharge reduction or rollback may be seen on some routes in the coming days.
What is fuel surcharge?
When oil prices go high in the international market, airlines add an additional fee to the ticket, called fuel surcharge, instead of increasing the base fare. This can be reduced or eliminated when oil prices fall, whereas changing the base fare is a bit more complicated.
Read this news also…
Indigo’s domestic flights costlier by ₹ 950, international by ₹ 10,000: Fare increased for the second time in 18 days; Extra charges will be imposed due to cost of fuel
Flights of the country’s largest airline company Indigo will become expensive from Thursday. The airline has imposed extra fuel charge up to a maximum of ₹950 on domestic flights and up to ₹10,000 on international flights. The new prices will be applicable from 12:01 am on April 2. Read the full news…
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