Aviation turbine fuel (ATF) prices for domestic airlines have been hiked by 5 per cent to their highest levels this year. The monthly price hike, the fourth straight one due to the spurt in international prices of crude oil and jet fuel, is expected to put additional pressure on airlines and might result in higher airfares during the upcoming festival season that usually sees a surge in travel demand.
ATF, or jet fuel, is the single-biggest cost for airlines and for Indian carriers, it accounts for over 40 per cent of their operational expenses. Jet fuel prices have risen by over 32 per cent since June and the current price levels are the highest since November of last year. Industry insiders suggest that travel demand in the festival season is seen as much higher than last year, while airlines have not been able to add capacity significantly. Given the situation, high jet fuel prices could force flyers to shell out even more.
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