During the festive season, flights and trains usually see a huge rush. With Dussehra and Diwali just a few months away, airfares could also rise due to an increase in Aviation Turbine Fuel (ATF) prices. Read on to know more!
Flight Tickets May Get Costlier With Rise In ATF
Aviation Turbine Fuel (ATF) prices have increased for the second consecutive month. ATF prices for domestic airlines have risen by 5.46%, which means an increase of ₹6.28 per litre. The price has now climbed to ₹121.28 per litre from ₹115 per litre. This comes right after the ₹5 per litre increase on August 1, when ATF prices went up from ₹110 to ₹115 per litre. Before that, prices had dropped by ₹5 per litre in July.
With this increase, air travellers may have to pay a little more in the coming weeks as fuel costs rise. Industry sources told Moneycontrol that airlines could increase ticket prices to cover the added expense. However, some carriers may choose to absorb part or all of the extra cost instead of passing it on to passengers.
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Factors That Could Affect Flight Prices
Many things can affect flight ticket prices. These include passenger demand, competition between airlines and the number of seats available. As per Moneycontrol, the festive season usually sees more people travelling by air. This may give airlines some room to increase ticket prices. However, airlines may not pass the full rise in fuel costs on to passengers.
ATF is one of the biggest costs for airlines. It makes up around 35-40% of their operating expenses. So, higher fuel prices can put pressure on airline profits, especially if airlines cannot recover the full extra cost through ticket prices.
Crude oil prices are also high right now. Renewed tensions between the US and Iran have raised concerns about global oil supplies. Brent crude was trading above $91 per barrel.
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Cover Image Courtesy: Canva Pro/ MoiseevVladislav (Representative Image)
FAQs
Why flight prices may get increase?
The flight prices may increase because of higher ATF costs.