Airfares likely to get costlier as ATF prices reach all-time high

ATF Price in India reached an all-time high level on June 16. This came after state-backed Oil Marketing Companies (OMCs) announced a rate hike for aviation fuel.

The rise in ATF prices is expected to increase the airfares further.

This may come as a dampener for the airline industry which is struggling to recover, post the Covid-19 pandemic.

According to a report by PTI, SpiceJet CMD Ajay Singh said that the rise in ATF prices and the depreciation of the rupee has left domestic airlines no choice but to raise airfares.

ATF prices make up to 30-40 per cent of the total cost of running of an airline. With the hike in aviation fuel prices, the margins of the company will rise further. The airlines will most likely raise the air ticket prices to break even.