Air travelers in India are facing a double whammy as leading airlines IndiGo and SpiceJet announced the addition of fuel charges to their ticket prices. This move comes at a time when airfares were already 70 per cent higher year-on-year, and the impact is expected to push prices up by an additional 7-12 per cent.
Manan Bajoria, Group VP, Growth at ixigo, shed light on the situation, stating, “Fares were already trending higher for the festive months of October and November due to high travel demand. Additional fuel charges by airlines will increase fares by ₹ 400-500 across key routes.” For example, an IndiGo Delhi-Mumbai one-way flight that previously cost an average of ₹4,700 has now surged to ₹5,300, marking a 12 per cent hike.
IndiGo, in response to rising aviation turbine fuel (ATF) charges, announced the inclusion of a fuel charge, effective from October 6. This fuel cost will range from ₹300 to ₹100 per sector, depending on the sector distance.
Festival cheer
The upcoming festival season has witnessed a notable spike of 72 per cent in airfares compared to the previous year. Some of the most significant increases have been observed on popular routes, with Delhi to Ahmedabad experiencing a substantial 89 per cent surge, followed closely by the Delhi to Srinagar route. The Delhi to Mumbai route has seen a 20 per cent increase, and the Bengaluru to Delhi route has witnessed a 30 per cent rise.
Bharatt Malik, Senior VP – Flights and Hotel Business at Yatra Online, anticipates ticket prices may see an increase ranging from 5 per cent to 7 per cent. “We are closely monitoring the situation and keeping a vigilant eye on any price adjustments made by airlines,” he stated.
New ATF pricing
In October, thanks to a new ATF pricing mechanism implemented by the government, airlines have accrued a 2.4 per cent benefit in Delhi prices of ATF. This benefit has been passed on to travelers in the form of lower tax in airfare. Ministry sources have explained that this change is made possible due to the new pricing mechanism introduced in October 2022. Furthermore, once crude oil prices fall, the fuel charge is expected to automatically rationalise.
As travelers brace themselves for the festival season, the impact of these fuel charges is poised to make air travel more expensive, underscoring the importance of early ticket bookings to secure the best possible prices.