- IndiGo CEO confirms fare increase unavoidable due to rising fuel.
- IndiGo implemented revised fuel charges effective October 6.
- Domestic and international fuel charges increased, varying by destination.
- ATF, 40% of operating costs, significantly impacts airline profitability.
IndiGo CEO Willie Walsh has said the airline has “no choice left but to look to increase fares” as it faces a “very significant” rise in its fuel bill, PTI reported on Thursday.
Aviation turbine fuel (ATF) can account for around 40 per cent of an airline’s operating costs, making carriers vulnerable to sharp price increases and raising the likelihood of higher airfares, according to Reuters. India’s largest airline has already revised fuel charges on domestic and international routes amid a sustained rise in jet fuel prices.
IndiGo Revises Fuel Charges On Domestic, International Routes
The latest revision, effective October 6, came after IndiGo said the month-on-month increase in ATF prices had exceeded 14 per cent, pushing costs to among their highest levels in the past decade, HT reported earlier.
Under the revised structure, IndiGo’s fuel charges on domestic flights range from Rs 375 to Rs 1,300, depending on the distance travelled. The charges were increased by Rs 100 to Rs 350 per sector.
For international flights, the revised fuel charges vary by destination, ranging from Rs 1,000 to Rs 10,000. Flights to Europe attract a fuel charge of Rs 10,000, while flights to Southeast Asia, the Gulf region and parts of East Asia attract a charge of Rs 5,500.
Why Rising Fuel Costs Are Pushing Airfares Higher
Aviation turbine fuel is one of the biggest expenses for airlines, accounting for a substantial share of their operating costs. Sharp increases in fuel prices can squeeze profit margins, particularly when airlines are unable to pass on the entire increase to passengers.
Fuel prices have remained volatile amid geopolitical tensions in West Asia. The impact on airlines is compounded by fluctuations in international oil prices and currency movements.
IndiGo’s latest move follows an earlier revision of fuel charges in April. The airline has said it will continue to monitor fuel prices and make adjustments as required.
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