New Delhi: Thursday’s 16.3 per cent hike in jet fuel prices or Aviation Turbine Fuel (ATF) has spurred SpiceJet and Indigo to call for a hike in airfare prices by a minimum of 10-15 per cent.
ATF is available to airlines at Rs 1.41 lakh per kilolitre. From Rs 72,062 per kilolitre at the start of this year, the ATF prices have doubled in the last six months. SpiceJet’s chairman and managing director Ajay Singh called for a 10-15 per cent increase in fared to ensure a sustainable operation cost for airlines in view of the fuel price hikes and the weakening of the rupee against dollar prices, News18 reported.
“The sharp increase in jet fuel prices and the depreciation of the rupee have left domestic airlines with little choice but to immediately raise fares and we believe that a minimum 10-15% increase in fares is required to ensure that cost of operations are better sustained,” Singh said in a statement.
He pointed out that the massive 120 per cent hike in air-fuel prices since June 2021 was not sustainable for the aviation industry and urged the government to take “urgent action” to reduce taxes on the ATF which are amongst the highest in the world.
“We have in the last few months tried to absorb as much burden of this fuel price rise, which constitutes more than 50% of our operational cost, as we could,” Singh added.
IndiGo has also urged the government to cut taxes and bring ATF under GST so that the benefit of the input tax credit can be availed. “To facilitate recovery of the aviation sector and to make flying viable for everyone, we would request the government to at least bring ATF under GST so that the benefit of the input tax credit can be availed,” said an IndiGo statement.
