With jet fuel (ATF) prices falling from what they were over the past few months, India’s largest airline IndiGo has withdrawn fuel charges it had imposed on domestic and foreign routes.
The fuel charge, announced by IndiGo early October, was based on distance slabs and varied between Rs 300 and Rs 1,000 per sector.
“IndiGo, India’s leading airline, is pleased to announce the removal of fuel charge applicable on its on domestic and international routes, effective January 04, 2024. The fuel charge had been introduced in October 2023, following a surge in aviation turbine fuel (ATF) prices. With recent reduction in ATF prices, IndiGo is withdrawing the charge,” IndiGo said in a statement.
The airline added that considering the dynamic nature of ATF prices, it will continue to adjust fares “to respond to any change in prices or market conditions”.
The introduction of the fuel charge, which came at the onset of the peak festival travel season, followed four consecutive monthly hikes in jet fuel prices, taking them to their highest in 2023 by early October. ATF prices have since seen three consecutive reductions. Jet fuel prices have declined nearly 14 per cent since October.
“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. 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,” the carrier said in a statement,” IndiGo had said in October while announcing the charge.
ATF is a major cost for airlines and for Indian carriers, it accounts for over 40 per cent of their operational expenses. In India, ATF prices are deregulated and are set in line with global rates. Along with the decline in international cude oil prices, which had touched $97 per barrel in September, jet fuel prices have also cooled down in the international market.
At present, ATF is priced at Rs 1,01,993.17 per kilolitre (kl) in Delhi, as per information from the country’s largest fuel retailer Indian Oil Corporation. In October, jet fuel was priced at Rs 1,18,199.17 per kl.
First uploaded on: 04-01-2024 at 12:41 IST
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
