Air fares are likely to rise next month with airlines passing on the impact of latest fuel price hike to passengers. On Thursday oil marketing companies hiked the price of aviation turbine fuel (ATF) by 3.5% the second successive hike in two months.
Fuel accounts for nearly 45-50% of operating costs for Indian carriers and any hike in fuel cost will impact their profits. Last September oil companies hiked ATF price by 7%. Prices dropped next month but have been rising again since January on the back of rise in global crude prices. Globally crude prices are 9% higher over December price.
"We are likely to increase fares,'' a senior Jet Airways executive said. Although no decision has been taken yet he indicated that the change in fares would come into effect from next month as travel demand in March is low.
Following the fuel price hike in September airlines had revised the fuel surcharge on domestic and international routes. The surcharge was increased by Rs 150-250 in domestic sector and $5 on international tickets.
01/03/13 Business Standard
