Indian Airlines increased fares by 15% on long routes: Jet fuel prices doubled due to increase in crude oil rates, effect of increasing tension in the Middle East.

Jet fuel is the biggest expense for airlines. Its share in total operating expenses is 30% to 40%.

The impact of increasing tension in the Middle East is now visible directly on the pockets of the common man. Indian Airlines has increased the airfares on long distance routes by about 15%. Bloomberg gave this information in one of its reports.

According to the report, due to the increasing war between America-Israel and Iran and the impact of the Hormuz Route, there is a continuous increase in the prices of crude oil and jet fuel. Whose impact is also visible on the global aviation industry.

Major airlines of Asia including India have also increased ticket prices and many companies are also planning to ground their planes. Experts say that this could be the biggest oil crisis since the 1970s.

Airlines say that due to increasing operational costs they have no option left but to increase fares.

Indian airlines may further increase fares

According to the report, in view of the increase in the prices of jet fuel i.e. ATF, Indian aviation companies may increase the fares further in the coming days. Airlines say that due to increasing operational costs they have no option left but to increase fares.

Jet fuel prices have almost doubled

The oil supply chain has been badly affected since the Iran-Israel war that started on February 28. Because of this, crude oil prices are continuously increasing. The price of Brent crude oil has come down to $ 93 per barrel today. A day earlier, the price of Brent crude oil had reached around $120 per barrel.

In many markets, jet fuel prices have doubled since the conflict began. Before the war, jet fuel prices were around $85 to $90 per barrel, which has now increased to between $150 to $200 per barrel. Due to the tension in the Middle East, more than 40,000 flights have been canceled across the world so far.

Due to the impact of the Hormuz Route, there is a continuous increase in the prices of crude oil and jet fuel.

Tickets may become expensive by up to 70% in Vietnam

Bloomberg reported that Vietnam’s government media has warned that air fares there could rise by up to 70%. The main reason for this is Vietnam’s heavy dependence on imported jet fuel.

According to industry analysts, Asian airlines are more vulnerable than European or American airlines because they do not have robust fuel hedging systems in place.

There is a situation of panic everywhere in the aviation sector.

Jun Goh, senior oil market analyst at Sparta Commodities, said, there is a situation of panic everywhere in the aviation sector. Asian airlines that have weak hedging programs are in the most trouble.

They had sold the tickets at a low price, but now they have to buy fuel at a very expensive rate. Some low-cost airlines are now preparing to ground their planes. Because flying at current fuel prices is proving to be a loss-making deal.

If the situation does not improve, small airlines may close down

Analysts at German bank Deutsche Bank say that if the situation does not improve soon, thousands of aircraft may be grounded around the world and some small airlines may also be closed.

Companies like Lufthansa may benefit

While most airlines are in trouble, companies like Lufthansa are seeing this as an opportunity. Lufthansa CEO Carson Spohr said his company has hedged fuel prices, which will give it a ‘relative advantage’.

Taking advantage of the impact of Middle East airlines, they are planning to increase their capacity on routes to Asia and Africa.

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