Flight Fuel Prices Hiked By Rs 16/Litre From October 1: What It Means For Airfares And Travellers

Air travel may get costlier this festive season. Weeks before Dussehra and Diwali, aviation turbine fuel (ATF) prices have been hiked by Rs 16 per litre. The new prices came into effect on Thursday, October 1. For domestic airlines, ATF prices were increased from Rs 121 to Rs 137 per litre, as per news agency PTI.

ATF Prices Hiked Again

This is the third consecutive month that flight fuel prices have been increased. ATF prices were raised by Rs 6.28 per litre in September. In August, the prices were hiked by Rs 5 per litre. In July, airline fuel costs were reduced by Rs 5.

The changes in ATF costs are based on the rupee-dollar exchange rate and movements in international benchmark prices. ATF prices are revised on the first day of every month.

ATF comprises up to 40% of operating costs for airlines. A hike in fuel prices can impact travellers if companies pass on the cost in the form of increased airfare.

While carriers may choose to raise airfares to offset fuel costs, there is also a possibility that they may absorb the hike, either fully or partially. The decision depends on factors such as competition on key routes, such as Delhi-Mumbai.

Travel demand usually increases during the festive season. The airfares are influenced by route demand, competition, and the available capacity of planes.

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Government Says No Price Cap On Airfare

Last month, Civil Aviation Minister K Rammohan Naidu said that the government will not impose a price cap on airfares, but will advise airlines to keep costs reasonable, PTI reported.

Speaking to the media on September 22, Naidu explained that ATF costs have risen for carriers due to the US-Iran war.

"We engage with the airlines continuously; we also have regular meetings with them. And we definitely point it out to them that during this festive season, you have to ensure that the fair prices are kept at a reasonable level so that the people who want to travel, especially in these important times, get to see the benefit," the minister stated.

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He added that the rise in ATF is due to the crisis in West Asia and “not necessarily because of the festive season”.

With rising ATF prices and no possibility of a price cap, travellers may have to shell out more for a trip.