Rising Aviation Turbine Fuel (ATF) prices are putting fresh pressure on Indian airlines, with carriers cutting flight frequencies on some routes as they look to manage higher operating costs.
According to The Times of India report, low-cost carrier IndiGo has already started trimming services from Hindon civil terminal near Delhi-NCR. The airline has reduced flight frequencies on three routes — Navi Mumbai, Kolkata and Varanasi. Navi Mumbai flights have been cut from daily to four days a week, Kolkata from daily to two days, and Varanasi from six days to five days.
IndiGo is now operating five routes from Hindon — Varanasi, Bengaluru, Kolkata, Chennai and Navi Mumbai. Bengaluru continues to operate daily, while the other routes have fewer services under the September schedule.
The cuts come as ATF prices have risen for the second consecutive month. The price of ATF for domestic airlines was increased by Rs 6.28 per litre, or taking it to Rs 121.28 per litre from Rs 115. This followed a Rs 5-per-litre increase in August.
ATF prices had fallen to Rs 110 per litre in July. This means the latest price is now Rs 11.28 per litre higher than the July level. State-owned oil companies revise ATF prices based on international benchmark rates and currency movements.
According to the report, an official mentioned that fuel is one of the biggest costs for airlines and can account for around 40%-60% of their operating expenses. As fuel prices rise, airlines face pressure on their profit margins unless they can offset the increase through higher fares, better aircraft utilisation or other cost-saving measures.
IndiGo had reduced domestic capacity by 5%-7% to manage losses, while Air India had cut flight frequencies by up to 22%, the report further mentioned.
The rising fuel bill has also prompted government intervention. In June, the government approved a to help airlines deal with sharp increases in jet fuel costs.
The move, reported by Reuters, was aimed at supporting domestic and international air connectivity amid the fuel price shock. The fund is intended to provide a cushion to airlines when ATF prices rise sharply.
For passengers, the impact may not be limited to ticket prices. Airlines could first respond by reducing flight frequencies, adjusting schedules or moving aircraft to routes with stronger demand.
If ATF prices remain high, travellers could see fewer flight options on weaker routes and potentially higher fares, especially as airlines enter the traditionally busy festive travel season.