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Airlines face rising operational costs as fuel prices go up

NEW DELHI: With the prices of Aviation Turbine Fuel (ATF) skyrocketing and State-run oil firms raising jet fuel prices by 18.5 per cent from Saturday midnight, airlines face rising operational costs.

“We will have to study the situation in totality and take a call. Jet fuel prices have been on the rise globally over the past couple of months. All airlines will be under pressure to take steps to meet this situation,” Air India’s corporate communication head Jitender Bhargava told The Hindu over phone from Mumbai.

In keeping with rising international oil prices, the ATF price charged from airplanes has been raised to Rs. 69,227.08 per kilolitre (kl) in Delhi from Saturday midnight, Indian Oil Corporation, the nation’s largest retailer, said. Till now, ATF was priced at Rs. 58,387.92 per kl in Delhi.

In Mumbai, which has India’s busiest airport, jet fuel prices have gone up to Rs. 76,625.68 per kl from Rs. 64,824.82 per kl. This is the fourth straight hike in ATF prices since February last year. State-run fuel retailers IOC, Bharat Petroleum and Hindustan Petroleum revise prices of jet fuel once every month in line with the international trend.

Airlines sources said high ATF cost would cause a major upset in their operations and cited examples of many international airlines curtailing their operations to keep costs down. Sources said a hike in fuel surcharge and revision of fares could well be on the cards.

Civil Aviation Minister Praful Patel has argued for reducing the high customs and excise duty on ATF and contended that a uniform rate of sales tax of four per cent by all States could help the aviation industry cope with the situation. Industry sources said airlines would soon review the situation arising out of the high ATF prices and take a decision on upward revision of fuel surcharge and domestic and international fares.

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