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Another big blow to airlines! Jet fuel prices hiked by almost 50%

With the start of domestic flights, DGCA had capped fares according to seven bands for next three months to keep flight tickets affordable. Now with ATF prices going up, airlines will be faced with difficult option of flying with limited planes or incur extra costs

twitter-logoBusinessToday.In | July 1, 2020 | Updated 12:12 IST
Another big blow to airlines! Jet fuel prices hiked by almost 50%
The ATF prices had significantly fallen in March before the flight operations were suspended in India

In a major blow to airlines facing losses due to the coronavirus lockdown, oil marketing companies increased jet fuel price by almost 48 per cent or by Rs 11,000 per kilolitre. Now the aviation turbine fuel will cost Rs 33,575/ kilolitre in Delhi. The ATF price in Mumbai will rise to Rs 33,070.56/Kl, and it'll cost Rs 38,543.48/Kl in Kolkata.

With the start of domestic flights, the regulatory body Directorate General of Civil Aviation (DGCA) had capped the fares according to seven bands for the next three months in order to keep flight tickets affordable. Now with the ATF prices going up, and considering cap on fare hike, the airlines will be faced with the difficult option of flying with limited planes or incur extra costs.

The domestic operations started with limited flights last Monday, and the latest announcement will only add to their woes. As per airlines, the demand for air travel is below average due to various restrictions, including mandatory quarantine and safety concerns.

Union Civil Aviation Minister Hardeep Singh Puri tweeted that around 44,593 passengers travelled in a total of 501 flights on Sunday alone. This means on an average just around 100 people were ferried in a plane with 180 seats.

Also read: When will international flights start? Here's what Aviation Minister says

Notably, the ATF prices had significantly fallen in March before the flight operations were suspended in India. Due to very limited air traffic, prices dropped further in April. In February, the ATF prices in Delhi were in the range of Rs 60-65,000 per kl.

The government has said domestic flight services in India will resume in a calibrated manner. The frequency of flights will be gradually increased.

Here's how the government has decided the pricing in the first phase of the air operations

  •     Class A (less than 40 mins): Rs 2,000 to Rs 6,000
  •     Class B (40-60 mins): Rs 2,500 to Rs 7,500
  •     Class C (60-90 mins): Rs 3,000 to Rs 9,000
  •     Class D (90-120 mins): Rs 3,500 to Rs 10,000
  •     Class E (120-150 mins): Rs 4,500 to Rs 13,000
  •     Class F (150-180 mins): Rs 5,500 to Rs 15,700
  •     Class G (180-210 mins): Rs 6,500 to Rs 18,600

Meanwhile, Day 1 of Unlock 1.0 also saw an increase in prices of LPG cylinders across the country. This hike in LPG cylinder prices comes amid a global increase in rates. The prices have been increased after three months of consecutive rate cuts. Indian Oil said that the price of LPG cylinder in Delhi has been increased by Rs 11.50 per cylinder.

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