Domestic airlines set to raise fares on costlier jet fuel

Mumbai: The cost of aviation jet fuel is on the rise, and with that domestic air fares are also set to see a northward trend.

The Economic Times, quoting a senior Jet Airways official said the airline has recently revived the practice of levying a fuel surcharge — a fare component linked to movements in jet fuel prices — on domestic flights.

It is quite likely that all the other airlines will ape the move.

“We used to charge between Rs 100 and Rs 300 depending on short- and longhaul sectors. Now we charge as much as Rs 700,” the report added. Jet-fuel is the biggest cost item for Indian carriers. 

Air fares have risen persistently in January. “An analysis of the last three months of airfare data for the top 20 air travel sectors reveals that the increased cost to airlines, contributed by the fuel prices surge and the rupee’s depreciation, has resulted in a 15% increase in airfares for a booking window of 0-14 days,” the report quoted Samyukth Sridharan, president and chief operating officer Cleartrip.

Since, February and March are lean months, and the airlines may not have room to increase fares so much. But there will be increases subsequently if jet fuel prices continue their climb, the report said quoting a senior executive at a budget carrier.

Global oil prices haqve moved up from as low as $30 per barrale in the last spring after the 2015-16 to around currant $55 dollar a barrel. Travel company executives said overall fares have increased in January. According to data on Makemytrip, the country’s biggest online travel portal, average fares dropped in November and December but rose in January. Ticket prices for the Delhi-Mumbai sector rose to Rs 4,266 in January, compared with Rs 3,908 the same month last year, Rs 4,914 on the Mumbai-Bangalore sector compared with Rs 4,573 a year earlier, and Rs 4,473 on the Mumbai-Chennai route, compared with Rs 3,784 last January. Rival Cleartrip noticed divergent trends that showed those booking early stood to benefit. Last year, spot-booking fares too had fallen drastically.