Govt ups AFT price, airlines divided over fare hike

The government increased the ATF prices by Rs 1,377 per kilolitre (kl) to Rs 57,843 per kl (in Delhi) with effect from early Thursday morning triggering speculation of a fare revision (the total impact of fuel hike varies from airport to airport depending upon the local sales tax).

However, there was no firm answer on a possible hike as the industry is up against a lean season when they normally bring down the fares — rather indulge in fare war — to attract flyers.

Jet fuel accounts for almost 40 per cent of an airline’s operational costs and hence some in the industry argue that to survive, airlines will have to go for a fare hike.

However, some in the industry — no one is willing to go on record — argue that there is no need for a fare hike since most airlines had in any case increased the fares in May.