Struggling with high jet fuel prices, airlines likely to raise prices: Report

Executives also said that prices are already affecting bookings and demand and demand is likely to slow further

It seems like the rally in airline tickets will continue a while longer as airlines will factor in the hike in jet fuels.

"Airlines can no longer absorb the additional burden of costs... so, expect another hike (in airfares) on 15th of June. And this trend will continue," an airline executive told The Economic Times.

Executives also said that prices are already affecting bookings and demand.

“Rise in ATF prices is a big concern for the industry and is impacting forward bookings due to the high fare environment,” ClearTrip head Gaurav Patwari told the publication.

"Although traffic rebounded and demand was robust during the latter half of the quarter, we were challenged by high fuel costs and a weakening rupee," IndiGo Chief Executive Ronojoy Dutta had said during the company's results. IndiGo reported a net loss of Rs 1,681 crore in the quarter ending March

Jet fuel prices were hiked by a steep 5.3 per cent Mid-May.

ATF (air turbine fuel) prices were hiked by Rs 6,188.25 per kilolitre, or 5.29 per cent, to Rs 1,23,039.71 per kl (Rs 123 per litre) in the national capital.

Subsequently, the Centre cut prices by 1.3 per cent on June 1st. The first cut after 10 rounds of hikes

Jet fuel makes up almost 40 per cent of the running cost of an airline and prices hit a record high last month with the tenth hike by the government.

ATF sales more than doubled to 540,200 tonnes in May as the aviation sector opened up after two years. ATF consumption was 401 per cent more than May 2020 but 16.1 per cent lower than the pre-Covid sales of 644,000 tonnes in May 2019.

(With PTI inputs)