New Delhi, Sept. 2: Air fares may rise marginally during the festive season because of a steep hike in fuel prices and a spurt in demand.
The price of aviation turbine fuel (ATF) has been hiked 6.9 per cent from September, the fourth since June.
According to officials, the latest hike is the result of a continuous fall in the value of the rupee against the dollar, which made the import of crude oil costlier. In Calcutta, jet fuel will cost Rs 85,645.14 per kl against Rs 80,317.03 per kl earlier.
Airlines said they were assessing the situation and would not increase fares immediately.
“We are going to go with the market trend and would price tickets accordingly. Though the increase in ATF prices affects us, we will not immediately go for a hike,” said a senior Air India official.
Low-cost carriers such as SpiceJet, IndiGo and GoAir indicated they might go for a slight hike during the festive season.
“During the festive season air fares tend to go up. In all probability, we would be increasing prices in the October-December period,” said a senior official of a low-cost carrier.
Aviation experts said the poor consumer sentiment would be a deterrent to any attempt to raise fares by a huge amount.
“Air fares may go up a little because of the festive season as well as an increase in ATF prices but this would not help airlines to gain revenues. If they hike prices too much, people may not just fly,” said Amrit Pandurangi, senior director of consultancy firm Deloitte.
ATF constitutes over 40 per cent of the airlines’ costs. Recently, the civil aviation ministry said they would speak to state governments to reduce taxes on ATF to help the industry as well as promote aviation.
“The rise in ATF prices will have an impact. We have been requesting the state governments to consider reducing the taxes on ATF, keeping in mind the rising oil prices,” aviation secretary K.N. Shrivastava said.