The cost of aviation turbine fuel (ATF) has registered a 7.5 per cent increase – a third increase in the span of a month. Despite this hike, the cost of ATF is lower than what it was in February and the consumption too has registered an increase with the operation of repatriation flights under the Vande Bharat mission. The 7.5 per cent hike would translate into Rs2,922.94 per kilolitre (KL). The cost of one kilolitre is Rs41,992.81, according to data released by the oil marketing companies. The 7.5 per cent hike is the third hike in June. Rates were increased by 56.6 per cent (Rs12,126.75 per kl) on 1 June, followed by Rs5,494.5 kl (16.3 per cent increase on 16 June. When domestic flights resumed operations on 25 May, the Directorate General of Civil Aviation (DGCA) had capped the fares till August in a bid to keep flight tickets economically viable for passengers. However, with the hike in the cost of ATF, and low passenger loads it would be a challenge for airlines to control their losses. However, this present hike is still much lower compared to the prices that existed prior to the outbreak of Covid-19. During February, the prices in Delhi ranged between Rs60,000 and Rs65,000 per kl. “With the partial opening of the domestic aviation sector – 33 per cent capacity at present – with repatriation flights operating under the Vande Bharat Mission for international passengers, ATF consumption has witnessed a fourfold increase from approximately 52 trillion metric tonnes (tmt) in April to 201 tmt in June,” said an official from IOCL. However, domestic airlines are a worried lot. “When the cost of ATF was low, there was lockdown and we weren’t flying any scheduled flights. Now when the demand is barely 45 per cent there has been a hike. Survival would become a challenge if the government doesn’t support us with sops,” said a domestic airline official.
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Airlines: facing headwinds
