In a bid to soften the blow for airlines, state oil marketing companies have limited the aviation turbine fuel rate hike to 25 per cent for scheduled domestic flights.
ATF price for non scheduled domestic flights and international routes has been substantially increased in view of sharp rise in crude oil prices. Following the revision IndiGo hiked fuel surcharge on domestic and international flights.
Addressing media persons, joint secretary (civil aviation ministry) Asangba Chuba Ao said the move provides critical relief to airlines and ensures that their operating costs on domestic routes remain manageable. He added that the measure will help prevent a potential industry wide crisis.
Domestic airlines have welcomed the government decision and called upon the government to extend price relief on international routes. Carriers with large international networks such as Air India and IndiGo are taking steps to mitigate the impact. Around 60 per cent of Air India’s capacity is deployed on international routes and with no protection on international rates, the airline management is considering cancelling a number of overseas flights.
IndiGo said ATF prices for international flights have more than doubled leading to a significant impact on airline’s operating costs. On domestic routes IndiGo will now levy a ₹275-900 surcharge (earlier it was a flat ₹425). Surcharge on international routes will vary from ₹900-10,000 depending on the distance (up from ₹425-2,300).
Airlines will now pay ₹1,04927 per kilolitre for scheduled domestic flights. This is 25 per cent higher than the rate that was charged to airlines (around ₹84,000). Rate for non-scheduled domestic flights has been increased to ₹2.07 lakh per kilolitre.
In an X post on Wednesday, the ministry of petroleum and natural gas said ATF prices in India were deregulated in 2001 and are revised on a monthly basis based on a formula of international benchmarks.
“ Due to the closure of Strait of Hormuz and extraordinary situation in global energy markets, price of ATF for domestic markets was expected to increase by more than 100 per cent on 1 April. In order to insulate the domestic travel costs from the substantial increase in international prices, PSU oil marketing companies of the Ministry of Petroleum, in consultation with the Ministry of Civil Aviation, have passed only a partial and staggered increase of 25 per cent to the airlines. Foreign routes will pay for the full increase in ATF prices consistent with what they pay in other parts of the world,” the Ministry said.