atf: Airfares may rise soon as jet fuel price record high in India; travel industry ‘dejected’ – Times of India

NEW DELHI: Aviation turbine fuel (ATF) prices on Tuesday touched the highest ever level in India, making the struggle to survive for Covid-ravaged airlines even harder.
A kilo litre (KL or 1,000 litres) for domestic flights now costs Rs 86,038.2 in Delhi and Rs 84,505.6 in Mumbai — the two busiest airports of India.
Officials across airlines say the aviation ministry should now automatically raise domestic fare caps given the situation or the industry will need to ask for the same.
“ATF price has been hiked by Rs 6,743.25 per KL or 8.5 per cent to Rs 86,038.16 per kl in Delhi. This is the highest ever price touched by ATF (in India). This is higher than Rs 71,028.26 per kl in August 2008 when international crude oil price had touched $147 per barrel,” said an airline official.
ATF alone accounts for almost 40% of Indian airlines’ operating costs as the country has among the most expensive jet fuel for domestic flights globally.
The hike came on a day when the struggling industry got no relief, yet again, in the budget. Ronojoy Dutta, CEO of India’s largest airline (by passenger carriage), IndiGo, said, “…we were expecting tax concession to the aviation industry in the forms of cut in ATF excise duty and allocation of concessional finance to airlines to help us come out of the pandemic.”
Omicron has hit the travel industry — that was barely beginning to get out of the Delta blow by last November when the latest wave struck — hard. Traveller numbers have again hit rock bottom.
Finance minister Nirmala Sitharaman extended the emergency credit line guarantee scheme for hospitality industry.
“The hospitality and related services, especially those by micro and small enterprises, are yet to regain their pre-pandemic level of business. Considering these aspects, ECLGS will be extended up to March 2023 and its guarantee cover will be expanded by Rs 50,000 crore to total cover of Rs 5 lakh crore, with the additional amount being earmarked exclusively for the hospitality and related enterprises,” the FM said in her speech.
However, the hospitality industry feels this may not be enough to save them from the repeated pandemic blows.
“The whole tourism, travel and hospitality industry is feeling quite dejected… there was an immediate opportunity for more direct intervention to support the highly stressed tourism, travel and hospitality companies and their employees,” said Nakul Anand, Federation of Associations in Indian Tourism & Hospitality (FAITH) chairman.
“This could have come in the form of wage support for employees of tourism travel and hospitality companies till tourism revival happens; infra status to hotels; e-visa fees waiver for all tourist visas till inbound revives; domestic income tax travel credit for Indian citizens and Indian companies; export status for tourism export earnings and setting up a GST review committee to re-examine (sector’s) pain points,” said Anand.


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