Airfares Set To Drop As Indigo Scraps Fuel Charges
India’s largest airline, IndiGo, has scrapped fuel charges, prompting a discounted ticket fare as jet fuel (ATF) prices started falling from earlier highs. Indigo had come up with the fuel charges, which were included in air fares, in early October, based on distance slabs ranging between Rs 300 and Rs 1,000 per sector, with the consecutive monthly hikes in jet fuel prices.
The jet fuel price had reached its highest in 2023 In early October.
However, the ATF has seen a fall of 14 percent since then, in line with global rates, which cooled down along with the decline in international crude oil prices. ATF accounted for over 40 percent of the operational expenses of Indian airlines, given that India imports the majority of their domestic share from abroad.
“IndiGo, India’s leading airline, is pleased to announce the removal of fuel charge applicable on its on domestic and international routes, effective January 4, 2024. The fuel charge had been introduced in October 2023, following a surge in aviation turbine fuel (ATF) prices. With the recent reduction in ATF prices, IndiGo is withdrawing the charge,” IndiGo said in a statement.
Considering the fluctuations in ATF prices, the airline will continue to adjust fares “to respond to any change in prices or market conditions.”.
“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 a 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 this in October while announcing the charge.
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.
