In spite of the fact that the prices of aviation turbine fuel (ATF) have risen by more than 100% due to the volatility of the global energy market and the closure of the Strait of Hormuz, the Indian government has allowed the airlines to hike the fares of the flights only by a certain percentage. This decision of the government would save the air passengers of the country from a steep hike in airfares.
According to the government statement, the domestic airlines would hike the airfares after this decision and would not put an additional burden on the air passengers of the country. All the Indian airlines are happy with the decision of the government but are not revealing anything regarding the hike in the airfares.
The airlines are already adding some of the higher costs to the airfares in the form of a fuel surcharge. Airlines have certainly stated that it will be easier for them to keep flight costs under control for the time being.
Regarding the decision, Petroleum and Natural Gas Minister Hardeep Singh Puri first stated, "To protect domestic travel costs from the sharp increase in international prices, oil marketing companies operating under the Ministry of Petroleum, in consultation with the Ministry of Civil Aviation, have permitted airlines to pass on only a partial and phased 25 percent increase (only ₹15 per liter). The full ATF fare increase will apply to international flights, in line with what airlines pay in other parts of the world."
Civil Aviation Minister Ram Mohan Naidu welcomed the decision, saying, "This decision will protect passengers from sudden, sharp fare increases, reduce the burden on domestic airlines, and support the continued stability of the aviation sector during this critical time. It will also benefit the overall economy by maintaining smooth cargo movement and maintaining air connectivity essential for trade and logistics."
Asangba Chuba Ao, Joint Secretary in the Ministry of Civil Aviation, said, "This move will make it easier for airlines to manage their domestic operating costs and eliminate the need to impose additional fuel surcharges on airline tickets." He further stated that with the partial ATF increase, airlines will be able to readjust their pricing strategies, and this step will help prevent a potential industry-wide crisis.
Experts say that this decision will certainly make flights from India to other countries, especially the Gulf, Europe, and the United States, significantly more expensive. Airlines operating on these routes already face longer distances due to the war, which consumes more fuel.
This increase in jet fuel prices is likely to put further pressure on airlines. According to the Petroleum Ministry, ATF prices have been market-determined since 2001. They are determined monthly based on international benchmarks.
Due to the global crisis, prices in the domestic market were expected to more than double from April 1st. To address this situation, all relevant government departments and companies have, after consultation, permitted a partial and phased increase of only 25 percent for domestic airlines.
The new ATF price for domestic airlines in Delhi is ₹1,04,927 per kilolitre, an increase of 8.56 percent (₹8,289 per kilolitre) from ₹96,638 last month. The full increase (up to 114.5 percent) will apply to international routes, non-scheduled, ad-hoc, and charter flights, which is at par with other countries internationally.
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