Too early to assess impact of current oil price rise on airfares, say experts


Too early to assess impact of current oil price rise on airfares, say experts

The rise in oil prices will increase costs for airlines, but it is too early to assess the impact of sudden increase in prices on airfares, according to industry stakeholders. Crude prices have jumped after drone attacks on two oil facilities in Saudi Arabia, which accounts for around 10 per cent of the global oil production.

A Vistara spokesperson said airfares are based on multiple factors such as demand, supply, competitive intensity, and do not have direct linkage to specific costs.

“However, rise in oil prices would certainly increase costs, affecting an industry that anyway has much higher average costs in India, but some of the lowest fares in the world,” the spokesperson said.

On Monday, an Air India official said that a sustained increase could result in higher ticket prices. Read More

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