NewKerala.com

Indian Airlines May Slash Capacity After May ATF Price Revision, Report Says

Indian airlines are considering capacity cuts after the next ATF price revision in May due to rising jet fuel costs. Short-haul and low-yield routes are expected to be most affected if fuel prices rise substantially. The government has implemented measures like a 25% cap on monthly ATF price hikes and reduced airport charges to cushion the sector. However, airlines remain cautious and are monitoring fuel price movements before making network adjustments.

Key Points: Airlines May Cut Capacity After ATF Revision: Report

  • Airlines may cut capacity after May ATF revision
  • Short-haul, low-yield routes at risk
  • Government cap on ATF price hikes may be withdrawn
  • 25% reduction in parking, landing charges at major airports
  • India's 85% oil import reliance adds vulnerability
2 min read

Airlines may cut capacity after May ATF revision: Report

Indian airlines may reduce flights on less profitable routes after the next ATF price revision in May, as rising jet fuel costs pressure the sector, says NDTV Profit report.

"Industry sources indicated that airlines may reduce frequencies on low-yield routes, with short-haul sectors expected to face the most significant impact if fuel costs rise substantially. - NDTV Profit report"

New Delhi, April 28

Indian airlines are likely to take a call on capacity cuts after the next ATF revision, as a sharp increase in jet fuel prices could force them to rationalise operations, particularly on less profitable routes, according to a report on Tuesday.

Domestic carriers are in a wait-and-watch mode as they assess the impact of rising Aviation Turbine Fuel (ATF) prices and prepare for possible changes following the next price revision due in May, NDTV Profit reported.

The report said industry sources indicated that airlines may reduce frequencies on low-yield routes, with short-haul sectors expected to face the most significant impact if fuel costs rise substantially. Routes with consistently low passenger occupancy may also see cuts.

Airlines are also evaluating multiple scenarios, including potential changes to the government-imposed cap on ATF price increases.

If the current 25 per cent cap on monthly price hikes is withdrawn, domestic flight cancellations could rise sharply, the report said.

At the same time, the government has taken steps to cushion the aviation sector from the impact of the West Asia crisis. These include a 25 per cent reduction in parking and landing charges at major airports, along with capping the increase in ATF prices at 25 per cent for April.

Despite these measures, airlines remain cautious and continue to closely monitor fuel price movements before making any network or capacity adjustments.

India's heavy reliance on oil imports -- which account for over 85 per cent of its fuel needs -- has heightened vulnerability to geopolitical disruptions, including the recent West Asia crisis that has already led to supply concerns in parts of the country.

Meanwhile, the government has raised excise duties on petroleum products, including high-speed diesel, with immediate effect, according to a notification issued by the Ministry of Finance.

The government also increased duty on ATF to Rs 42 per litre from Rs 29.5 per litre earlier, while export duty on petrol remained unchanged at nil. Separately, oil marketing companies had raised ATF prices.

- IANS

Share this article:

Reader Comments

J
Jessica F
It's crazy how much global events affect our daily travel here in India. I was planning a short trip to Goa next month, but now I might have to rethink. Price hikes or fewer flights—neither option is great for consumers.
P
Priya S
Airlines should focus on route optimization rather than just cutting capacity. Many tier-2 cities need better connectivity for economic growth. But I agree, with ATF prices rising, it's a tough balancing act for both carriers and passengers. 🙏
R
Rohit P
The government's relief on parking charges is good, but the real issue is that 85% import dependency—that's a structural weakness. Every global crisis hits us harder. We need more strategic reserves and maybe even boost domestic oil exploration to cushion these shocks. Yaar, ab toh common man hi struggle kar raha hai.
J
Justin A
I understand airlines need to cut loss-making routes, but what about people from smaller cities? They'll have even fewer options. Domestic aviation is becoming a luxury again. 🛩️
A
Aditya G
The government's 25% cap on ATF hike is helpful, but if they withdraw that, expect massive cancellations on short routes like Delhi-Chandigarh or Mumbai-Pune where margins are thin. Airlines need a more sustainable pricing model instead of sudden capacity cuts that disrupt travel plans.
T

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50