From October, you may have to pay extra on your air travel as oil marketing companies might increase aviation turbine fuel prices after the government recently raised custom duties to 5% on 19 items, including the jet fuel.
Rising fuel prices, intense competition and inability to pass on spiralling expenses have been negatively impacting the domestic airlines. The latest decision to impose 5% customs duty on ATF, which is a major component of an airline's operational costs, would add to the woes, according to experts.
In recent weeks, airline industry has indicated that air ticket prices could go up in October when the peak travel season begins.
On Wednesday, the government raised import duties on ATF and 18 other items, as it looks to check the widening current account deficit.
Grappling with soaring costs, airlines have been seeking reduction in taxes and duties related to the aviation sector. On September 10, SpiceJet’s chief Ajay Singh indicated that fares could be hiked in the next few months.
“It is also important that we increase yield and pass on some of the costs increases to the customers. We hope that can happen in the next few months,” he had said.
Generally, yield refers to average fare paid per passenger. On September 4, IATA Director General and CEO Alexandre de Juniac said the steep rise in fuel prices and fall in the rupee value are putting “acute pressure on profits” of airlines in the country.
The International Air Transport Association (IATA) is a grouping of more than 280 airlines.
(With PTI inputs)