Jet fuel prices surge 100% to cross ₹2L in India
What's the story
Air travelers in India are likely to face a major increase in airfares as jet fuel prices have more than doubled for April. The hike comes amid the US-Iran war and is expected to hit domestic and international flights hard. Oil PSUs announced the new aviation turbine fuel (ATF) pricing on Wednesday, with domestic ATF increasing by some 115% and international ATF by around 107%.
Price surge
Prices cross ₹2 lakh mark in Delhi, Kolkata, Chennai
In Delhi's Indira Gandhi International Airport (IGIA), a kilo liter of ATF for domestic flights will now cost ₹2,07,341.22. This is a whopping 114.5% increase from last month's price of ₹96,638.14. The price has crossed the ₹2 lakh mark in Delhi, Kolkata and Chennai for the first time ever. Mumbai's Chhatrapati Shivaji Maharaj International Airport (CSMIA) will see a similar hike with prices going up by 115% from last month to ₹1,94,968.67 in April.
Global impact
International ATF pricing also skyrockets
The price of ATF for international flights has also crossed the $1,000 mark for Indian carriers. In Delhi, a kilo liter will now cost $1,690.81—an increase of 107% from last month's price of $816.91. Mumbai's pricing is similar while Kolkata will see the highest price at $1,727.3—up 102% from last month's $855.25—with a depreciating rupee further adding to the burden on airlines as most costs are dollar-denominated.
Operational challenges
Fuel surcharges likely to increase further amid rising costs
The rising ATF prices are set to change the cost structure for airlines, which already had one of the most expensive jet fuels globally. Currently, jet fuel accounts for 40%-45% of their total operating costs. This percentage is likely to change significantly, making operations unviable for weaker players in the industry. Major airlines like IndiGo and Air India group had already imposed or hiked fuel surcharges last month amid these rising costs.