ATF price hike: SpiceJet calls for 10-15% hike in airfares
PremiumATF price hike: The increase in jet fuel price will raise the operating cost for airlines
In the wake of rising prices of jet fuel, budget carrier airline SpiceJet today called for 10-15 per cent hikes in airfares to sustain the operation.
SpiceJet Chairman and Managing Director (CMD) Ajay Singh today said there is no option left other than to hike airfare by 10-15 per cent to meet the operation cost of airlines.
"The sharp increase in jet fuel prices and depreciation of Rupee have left domestic airlines with little choice but to immediately raise fares. we believe that a min 10-15 per cent increase in fares is required to ensure that cost of operations is better sustained," Singh said.
The SpiceJet chairman further stressed on the multiple ATF price hikes within a year and said, "Aviation turbine fuel prices have increased by more than 120 per cent since June 2021."
Shares of SpiceJet fell more than 5% after Singh's comments.
ATF prices touch new record
Jet fuel prices were hiked by the steepest ever 16 per cent today. The price of aviation turbine fuel (ATF) has been increased by ₹19,757.13 per kilolitre, or 16.26 per cent, to ₹1,41,232.87 per kl ( ₹141.2 per litre) in the national capital, according to a price notification of state-owned fuel retailers.
The hike takes jet fuel prices to record high across the country. ATF prices are revised on the 1st and 16th of every month based on the average of benchmark international rates.
The increase in jet fuel price will raise the operating cost for airlines. ATF makes up to 40 per cent of an airline's operating cost.
The June 1 reduction had come after 10 rounds of price increases this year.
ATF price in metros
ATF in Mumbai now costs ₹1,40,092.74 per kl, while it is priced at ₹1,46,322.23 in Kolkata and ₹1,46,215.85 in Chennai. The rates differ from state to state, depending on the incidence of local taxation.