Biggest domestic carrier IndiGo on October 5 said that it is introducing a fuel charge on domestic and international routes, effective October 6 in order to check rising ATF prices.
The decision follows the significant increase in Aviation Turbine Fuel (ATF) prices, which have surged in the last three months with consecutive price hikes every month, the carrier said in a statement.
ATF accounts for a substantial portion of an airline's operating expenses, necessitating fare adjustment to address such a cost surge. Under this pricing structure, passengers booking IndiGo flights will incur a fuel charge, per sector, based on the sector distance, it added.
On October 1, the government jet fuel or ATF price by 5 per cent -- the fourth straight monthly increase since July.
Aviation turbine fuel (ATF) price was increased by Rs 5,779.84 per kilolitre, or 5.1 per cent, in the national capital to Rs 118,199.17 per kl from Rs 112,419.33, according to a price notification of state-owned fuel retailers.
The increase comes on the back of the steepest-ever 14.1 per cent increase (Rs 13,911.07 per kl) effected on September 1, and an 8.5 per cent or Rs 7,728.38 per kl increase on August 1.
The fourth straight increase in prices of jet fuel, which makes up for 40 per cent of an airline's operating cost, will increase the burden on already financially-strained airlines.
On July 1, the ATF price had gone up by 1.65 per cent or Rs 1,476.79 per kl. In four increases, ATF prices have gone up by a record Rs 29,391.08 per kl.
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