- The share price of the Indian aviation companies like Indigo, Jet Airways and others dropped on Thursday afternoon.
- Alongside the spike in aviation turbine fuel (ATF) prices, SpiceJet announced its decision to increase its fare by up to 15%.
- SpiceJet CEO noted that the ATF cost has increased as much as 120 percent since June 2021
The share price of the Indian aviation companies like Indigo, Jet Airways and others dropped on Thursday afternoon, after the aviation turbine fuel (ATF) prices were hiked to a record high of 16%.
Alongside the spike in aviation turbine fuel prices, SpiceJet announced its decision to increase its fare by up to 15%. The low-cost carrier made this decision to counter the soaring fuel prices and the depreciation rupee against the US dollar.
“The sharp increase in ATF prices and the depreciation of the rupee have left the domestic airlines with no choice but to immediately raise airfares. A minimum 10-15 per cent increase in air fares is required to ensure that cost of operations are better sustained,” Ajay Singh, the chairperson and managing director of SpiceJet, said.
Singh also noted that the ATF cost has increased as much as 120 percent since June 2021 and urged the government of India to reduce taxes on jet fuels. ATF prices are linked to global crude oil prices, which have been increasing ever since the Russia-Ukraine war.
Region | Cost of ATF per kiloliter |
Delhi | ₹1,41,232.87 |
Kolkata | ₹1,46,322.23 |
Mumbai | ₹1,40,092.74 |
Chennai | ₹1,46,215.85 |
Source: Media reports
The ministry of civil aviation should consider increasing the upper limits on domestic airfares as the rising fuel prices has become a “real problem”, IndiGo CEO Ronojoy Dutta said earlier this month.
Price rise may be on its way
Notably, there may be more price rises in the coming days as airlines look to maintain their margins. The airfares have already increased in 2022 as domestic travelers are paying 60% more than they did last year, on popular routes.
“In this scenario, a rise in…