Oil companies on Thursday hiked the price of aviation turbine fuel (ATF) by 5.2 per cent, in yet another blow to India’s struggling-to-survive airlines. The price per kilolitre (kl) of jet fuel after the latest monthly revision in Delhi, India’s busiest airport, will be Rs 76,378.8 up from Rs 72,605. In Kolkata, ATF will cost Rs 81,441.06 per kl – crossing the Rs 80,000-mark for the first time since July 2014.
While ATF prices are now at over four-year high, airlines are bleeding due to the rupee crashing before the US dollar. Most of airline costs are dollar-denominated like aircraft rentals, foreign bases, expat pilot pay and maintenance contracts and their costs in rupee terms have sharply rises.
While these things are not in airline hands, Indian carriers claim they are unable to charge fares reflecting higher costs due to stiff competition. However, spot fares have started rising in recent weeks. Airline comments were awaited on what impact the latest ATF price hike will have on fares.
Rating agency Crisil on Thursday said airlines will need to hike fares by 12 per cent to offset the double blow of rising oil prices and falling rupee.Read More