New Delhi: The government has allowed only a partial increase in aviation turbine fuel (ATF) prices for domestic airlines. The hike is about 8.5 percent, taking the price to Rs 1,04,927 per kilolitre.
Officials said this limited increase is aimed at protecting airlines from a sudden cost shock and avoiding a wider crisis in the aviation sector.
No extra burden on passengers
A key benefit of this move is that airlines are unlikely to add extra fuel charges for passengers. Normally, a sharp rise in fuel prices leads to higher ticket prices.
However, with this controlled hike, airlines can manage costs without passing the burden on travellers.
Fuel is major cost for airlines
ATF is a major expense for airlines, making up nearly 40 percent of their total operating costs. Even small increases can significantly impact profitability.
The government said that by controlling the price increase, airlines can continue operations smoothly and keep ticket prices competitive.
Global tensions raise costs
Fuel prices have been rising due to ongoing tensions in West Asia, which have pushed global oil prices higher. Airlines are also facing higher costs because they are taking longer routes to avoid restricted airspace, leading to more fuel consumption.
In recent weeks, some airlines had already increased or introduced fuel surcharges due to these pressures.
Different pricing for domestic, foreign airlines
Domestic airlines will pay a lower price compared to foreign and charter airlines. While domestic carriers saw a limited increase, foreign airlines are paying full market-linked rates, which are significantly higher.
This step ensures Indian airlines remain competitive in the domestic market.
Industry welcomes the move
Airlines have supported the government’s decision, calling it timely and helpful. They said such steps are important for maintaining financial stability in a difficult global environment.
The aviation ministry also said it will keep monitoring airfares and will step in if prices rise unusually.
