The cost of flight tickets for the fliers across the country is likely to go up on the back of the rise in the jet fuel prices.
The industry sources peg an increase of almost 1% on the ticket prices due to this. "This 2.5% increase in ATF has a direct impact on profits of airlines. Up to 1% increase in ticketing cost can be expected," a senior airline executive told DH.
This will come as a double whammy for the fliers across the country who have seen a steep rise in the airfares as Jet Airways grounded its fleet. According to industry estimates, post Jet grounding its planes, some sectors have seen a jump of as high as 50%, causing a lot of inconvenience to the customers.
Jet fuel (ATF) price was hiked by over 2.5%, the third straight monthly increase in rates on the back of firming global prices, according to a price notification issued by state-owned oil firms.
The price of Aviation Turbine Fuel (ATF) was hiked by Rs 1,595.63 per kilolitre, or 2.5%, to Rs 65,067.85 per kilolitre in the national capital.
The increase comes on the back of a Rs 677.1 per kilolitre hike in rates effected from April 1, and a steep 8.1% (Rs 4,734.15 per kilolitre) jump in prices on March 1.
The Indian aviation industry has been passing through turbulent times recently, with country's first private airline carrier Jet Airways grounding its fleet after it became cash strapped. The increase in the ATF prices is likely to put extra pressure on the margins of the airline companies, according to analysts. The airline industry, with its high costs and increasing competition, has been operating on the wafer-thin margins.