As demand for air travel surges during festivals like Chhath and Diwali, passengers are likely to face even higher fares due to a significant hike in Aviation Turbine Fuel (ATF) prices. Government oil marketing companies raised ATF prices by 3.35%, adding Rs 2,941.5 per kilolitre from November 1, 2024. This comes amid rising crude oil prices, placing additional pressure on airlines to raise fares.
ATF Price Hike Details
In Delhi, the price of ATF now stands at Rs 90,538.72 per kilolitre, up from Rs 87,587.22 last month. The new rates in other cities are:
- Kolkata: Rs 93,392 per kilolitre
- Mumbai: Rs 84,642 per kilolitre
- Chennai: Rs 93,957 per kilolitre
Impact on Air Travel Fares
With ATF costs making up about 40% of airline operating expenses, the price hike will likely lead to an immediate increase in airfares. Domestic airlines, particularly as they enter the peak season of weddings and New Year travel, may transfer this additional cost to passengers. For example, IndiGo recently reported a drop in profits due to rising fuel prices, which could prompt airlines to adjust fare structures to mitigate the impact.
Higher Costs for New Year Travelers
The recent ATF hike comes just as many plan their New Year vacations, with tourist travel expected to peak. The increased operational costs mean travelers should brace for higher fares through the year-end holiday season, potentially affecting travel budgets.