Wednesday, July 01, 2020

Jet fuel price hiked third time in a month, airlines face uncertainty

New Delhi: Survival just got tougher for India’s financially struggling airlines. Jet fuel price was hiked by a steep 7.5% on Wednesday, the third price increase in a month even as domestic air traffic is operating at just about one-third level and schedule international flights remain suspended since March 22.

While Indian carriers — with at least three almost out of cash; two backed by a strong business house and only one with its own cash reserves — have got no support from the government so far during the pandemic, aviation turbine fuel price (ATF) is being hiked ever since domestic flights were allowed to resume partially on May 25.

Rates were hiked by a record 56.6% (Rs 12,126.75 per per kilo litre or kl) on June 1, followed by Rs 5,494.5 per kl (16.3%) increase on June 16. On Wednesday, prices was hiked by another 7.5%. Now, a kl of ATF for domestic flights costs Rs 41,992.8 and Rs 41,575.9 in Delhi and Mumbai, respectively.

To be sure, domestic ATF price is lower than what it was a year ago when it was at Rs 49,231.4 and Rs 48959.8 in Delhi and Mumbai, respectively, as per HPCL website. But in that pre-pandemic time, air travel was still flying high and witnessing growth in flyer numbers.

“ATF price was low when we were not flying any scheduled flights and are being hiked ever since domestic ones were allowed to resume. While airlines are allowed to operate 45% capacity, air traffic demand is barely for a third of the originally planned capacity. If the government can’t support us, they should not hasten our demise which we are trying to delay as much as possible,” said a senior airline official.
01/07/20 Saurabh Sinha/Times of India
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