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Government Caps Domestic ATF Hike at 25% Amid Global Surge; Airlines Await New Prices

The government has capped the domestic ATF price increase at 25% to shield airlines from global price shocks. This partial adjustment followed the closure of the Strait of Hormuz which threatened a 100% spike. Indigo revised its fuel surcharge in response, while the Federation of Indian Airlines has sought further government support. Airlines and passengers now await the fresh ATF price announcement for May.

Key Points: ATF price cap at 25%: Airlines await fresh announcement

  • Govt caps domestic ATF hike at 25% amid global surge
  • Partial adjustment protects domestic air travel costs
  • Indigo revises fuel surcharge on domestic, international routes
  • FIA seeks urgent support for sustainable airline operations
2 min read

Government caps domestic ATF price hike at 25% amid global surge; Airlines await tomorrow's fresh announcement

Government limits ATF price hike for domestic airlines to 25% amid global surge. Airlines await tomorrow's fresh price announcement for May.

"Industry insiders say carriers are hoping for further relief or at least stability in tomorrow's announcement - Industry sources"

By Snehal Satghare, New Delhi, April 30

India's domestic airlines are bracing for tomorrow's ATF price announcement as they continue to navigate volatility in global energy markets. The government had earlier stepped in to shield the domestic aviation sector from a potential price explosion, but industry players remain anxious about the next revision.

According to industry sources, international benchmarks had pointed to a surge in jet fuel prices this month. However, on April 1, the government, in consultation with the Ministry of Petroleum and Natural Gas and the Ministry of Civil Aviation, directed Public Sector Undertaking (PSU) Oil Marketing Companies to limit the increase for domestic airlines to just 25 per cent, equivalent to a modest Rs 15 per litre hike. This partial and staggered adjustment was designed to protect domestic air travel costs from the full brunt of international price shocks.

The decision came against the backdrop of extraordinary global developments, including the closure of the Strait of Hormuz, which had triggered expectations of more than a 100 per cent spike in ATF prices for the domestic market on April 1.

While domestic carriers received this relief, airlines operating on international routes are paying the full increase in line with global benchmarks.

In response to the April hike, Indigo, the country's largest airline, revised its fuel surcharge for both domestic and international routes.

Just two days ago, the Federation of Indian Airlines (FIA) wrote to the government seeking urgent support on ATF pricing to ensure the sustainability of airline operations. Industry insiders say carriers are hoping for further relief or at least stability in tomorrow's announcement to help manage rising operational costs and keep airfares affordable for passengers.

The aviation sector has been under pressure due to fluctuating fuel costs, which constitute a significant portion of airline expenses. Any further moderation in ATF prices could provide much-needed breathing space to domestic carriers, while a fresh upward revision might force additional fare adjustments.

The Ministry of Civil Aviation and oil companies are expected to issue the updated ATF prices for May tomorrow. Airlines and passengers alike will be closely watching the announcement.

- ANI

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Reader Comments

S
Sneha F
I work in aviation and can tell you that ATF constitutes nearly 40% of an airline's operating cost. The government's intervention was necessary but temporary. The real issue is our dependency on imported crude. We need to accelerate biofuel R&D or explore energy alternatives. Otherwise, this cycle of price shocks will keep repeating.
R
Ravi K
Instead of capping prices, why not reduce excise duty on ATF for domestic airlines? The taxes on aviation fuel in India are among the highest globally. The government collects huge revenue but airlines and passengers both suffer. A more structural solution would benefit everyone in the long run.
M
Michael C
As someone who travels frequently between Delhi and Mumbai, I'm okay with a modest fare hike if it ensures airline sustainability. But a 100% spike would have grounded many flights. The government did well to step in. Let's see what May brings. Hope the Strait of Hormuz situation stabilizes globally.
A
Anjali F
My family had to cancel our planned trip to Kerala because flight prices shot up after the surcharge was added. It's frustrating that despite the government's cap, airlines find ways to pass costs to passengers. The FIA letter to the government is good, but I hope they also think about the common man.
N
Naveen S
Why are international airlines not getting any relief? This creates an uneven playing field. Indian carriers like Indigo and Air India operate both domestic and international routes. This selective support doesn't make sense. Either help all or devise a comprehensive pricing policy.

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