Airfares follow ATF to a new altitude

With this rise, passengers would now be paying anywhere between Rs 100-500 more for tickets on different sectors. Analysts say that sectors like Delhi-Mumbai which have a basic fare of anywhere over Rs 3,000, would now cost nothing less than Rs 3,300-3,400 per ticket. Along with fuel surcharge, the total price of the ticket would now stand at Rs 7,000-7,500. In January this year, the total price was Rs 4,500-5,000 per ticket.

The decision to increase airfares by a disproportionately high 10 per cent comes as airlines are combating mounting losses, expected to be in the region of Rs 9,000 crore this fiscal. “It must be understood that we have not hiked airfares every time there has been a rise in ATF prices. There is a big element of jet fuel price increases that we have not been able to pass on to the customer, and this hike is aimed at reducing that gap,” a UB Group official said.

The hike in ATF prices by oil marketing companies today comes even as crude oil prices have softened by over 15 per cent in the past fortnight. On July 11, oil touched its all-time high of $147 a barrel. It has now come down to $123 a barrel. This had prompted many in the aviation industry to believe that jet-fuel prices would finally relent in August and provide more breathing room for beleaguered airlines that were caught between rising airfares and lower load factors.

ATF in Delhi will now cost Rs 1,931 per kilo litre more from midnight tonight.

The fuel would be priced at Rs 71,028 per kilo litre from August 1. In Mumbai, the city which has the nation’s busiest airport, prices have been hiked to Rs 73,673 as against Rs 71,630 per kl. This is the sixth time that jet fuel prices have been hiked this year alone.

2.8 % Hike in prices of aviation turbine fuel

Rs 100-500 The extra fare for tickets on different sectors

Rs 7,000-7,500 Price of a Delhi-Mumbai ticket now

Rs 4,500-5,000 Price of a Delhi-Mumbai ticket in January 2008

50 % Hike in fares by full-service carriers in this calendar year

But isn’t crude going down?

The hike in ATF prices by oil marketing companies comes even as crude oil prices have softened by over 15 per cent in the past fortnight. The dipping crude prices will take at least one more month to get factored in.

It must be understood that we have not hiked airfares every time there has been a rise in ATF prices. There is a big element of jet fuel price increases that we have not been able to pass on to the customer, and this hike is aimed at reducing that gap.

– A UB Group official