Domestic Airlines Face New Challenges as Jet Fuel Prices Surge Over 5%

The aviation sector in India is grappling with fresh challenges as jet fuel prices for domestic airlines saw a significant hike of Rs 6.2 per litre on Tuesday, marking an increase of over 5%. This latest adjustment brings the cost of aviation turbine fuel to Rs 121.2 per litre, according to sources from Indian Oil Corporation Limited reported by NDTV Profit.

This is the second consecutive month that aviation fuel prices have been raised. Previously, on August 1, prices were increased from Rs 110 to Rs 115 per litre, following a minor reduction in July where rates fell by Rs 5. The ongoing rise in fuel costs is expected to further strain the financial resources of airlines, as jet fuel constitutes about 40% of their operational expenditure.

The current increase in fuel prices coincides with escalating global oil rates, driven by geopolitical tensions in West Asia, which have also led to more airspace restrictions, compounding operational costs for airlines. In April, major carriers including Air India, IndiGo, and SpiceJet expressed their concerns to the Union government, highlighting that the Indian aviation industry was on the brink of halting operations unless immediate financial assistance was provided.

Furthermore, in a related development, Air India announced on May 13 that it would temporarily suspend certain international routes from June to August due to the dual challenges of airspace restrictions and soaring jet fuel prices. This move underscores the precarious situation faced by airlines in the current climate.

In addition to the rise in jet fuel prices, the cost of commercial liquefied petroleum gas (LPG) has also seen an uptick. Reports indicate that the price of 19-kg commercial LPG cylinders has been raised by approximately Rs 10, further affecting the cost of living for many households and businesses across the country. This increase in fuel prices is symptomatic of broader economic trends that are impacting various sectors, prompting calls for urgent governmental intervention to stabilize the situation.

Source: scroll.in