“IndiGo Imposes Fuel Charge to Counter Soaring ATF Prices”
India’s largest domestic carrier, IndiGo, has announced the imposition of a fuel charge on domestic and international flights, effective October 6, to counter the increasing costs of Aviation Turbine Fuel (ATF).
IndiGo, the leading domestic carrier in India, has taken a significant step to address the escalating costs of Aviation Turbine Fuel (ATF). The airline announced on October 5 that it will introduce a fuel charge on both domestic and international routes, starting from October 6. This decision is in response to the substantial and consecutive hikes in ATF prices over the past three months.
The surge in ATF prices, with monthly increases, has been a growing concern for the aviation industry. ATF constitutes a significant portion of an airline’s operating expenses, making fare adjustments necessary to cope with the rising costs. Under the new pricing structure, passengers booking IndiGo flights will now incur a fuel charge per sector, determined based on the sector’s distance.
This development follows the Indian government’s decision to raise jet fuel prices by 5 percent on October 1, marking the fourth consecutive monthly increase since July. In the national capital, the price of aviation turbine fuel (ATF) was elevated by Rs 5,779.84 per kilolitre, representing a 5.1 percent surge, bringing it to Rs 118,199.17 per kl from Rs 112,419.33, as per the notification issued by state-owned fuel retailers.
These price hikes compound the already challenging financial situation faced by airlines, given that jet fuel accounts for 40 percent of their operating costs. Since July 1, ATF prices have undergone four increments, totaling a record-breaking increase of Rs 29,391.08 per kl. This situation underscores the need for airlines to implement measures, such as fuel charges, to offset the impact of rising ATF prices on their operations and profitability.
Sources By Agencies
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