Air fares to cost more as oil prices shoot up

New Delhi, Oct 1 (UNI) Private airlines today announced their decision to hike fuel surcharge by Rs 100 per ticket as government-owned oil marketing companies increased aviation turbine fuel (ATF) prices by Rs 1,600 to 1,700 for the current month.

The fuel price upturn will result in a cost increase of more than four per cent for domestic airlines and more than eight per cent for international airlines. Consequently, airlines will start charging Rs 750 as fuel surcharge in coming days.

Aviation fuel prices are revised at the beginning of every month based on average international price in the previous month. In Delhi, aviation fuel for domestic airlines will now cost Rs 39,767.75 per kilolitre as against Rs 38,163.23 a month ago.

In global markets, oil has surged over 30 per cent this year to an all-time high of 83.90 dollars per barrel in late September on expectations of a supply shortfall in the fourth quarter as heating demand peaks. A weaker dollar has also propped up oil and other commodities as they become cheaper for other currency holders.

Aviation fuel comprises around 35 per cent of airlines' total operational cost. With winter schedule round the corner, air passenger traffic is set to grow further as airlines scramble to cover costs.

UNI