Fuel one of the largest contributors in operating cost for airlines in Indian it can contribute up to 50 percent of total operating cost for airlines. Indian Airlines faces the Fuel cost pressure because of changing Crude oil process that directly effects the ticket process and operational express for airlines.
Why Aviation Turbine fuel costs are high in India
In India Majority of fuel is imported and cost its highly effected by the market and US dollars which results in the High fuel cost and In India ATF is Highly taxable such as Sate taxes and VAT.
Impact on Airlines
As Fuel price increased it will affect airlines profits as Airline has to pay more for Fuel resulted in reduction in profit margin. Airline also reduced the route which is less profitable as we can also see airlines doing flight reduction.
The low-cost carriers face more impact as they have very less cost margin.
Impact on Passengers
As a passenger you may experience hight ticket price, fewer flight options available.
How Airlines Responding
Airlines seeking for government help to protect airlines from increasing ATF prices and airlines looking for more fuel-efficient aircrafts.
Government approve credit for airlines
Indian government granted airlines credit worth 5000 Crore Indian rupee for airlines with the repayment period of seven years to help airline protect them from increasing Fuel prices.
