Domestic airlines are currently in a ‘wait-and-watch’ mode, assessing how rising fuel expenses will impact their bottom lines
NEW DELHI
Indian airlines are bracing for a potential reduction in flight capacity as they await the next revision of Aviation Turbine Fuel (ATF) prices in May.
According to reports, a sharp increase in jet fuel costs could force carriers to rationalize their operations, particularly by cutting frequencies on less profitable, short-haul routes.
Domestic airlines are currently in a “wait-and-watch” mode, assessing how rising fuel expenses will impact their bottom lines. Industry sources suggest that if costs jump substantially, routes with consistently low passenger occupancy will be the first to face the axe. This caution persists despite recent government efforts to cushion the blow, including a 25 percent reduction in parking and landing fees at major airports and a temporary cap on April fuel price hikes.
However, the outlook remains volatile. The Ministry of Finance recently notified an increase in the duty on ATF, raising it from Rs 29.5 to Rs 42 per litre. If the government decides to withdraw the current 25 percent cap on monthly price increases, experts warn that domestic flight cancellations could spike sharply.
India’s aviation sector is particularly vulnerable right now due to the nation’s heavy reliance on oil imports, which cover over 85 percent of its needs. With geopolitical tensions in West Asia threatening global supply chains, airlines are being forced to re-evaluate their networks. For travelers, this could mean fewer choices and higher fares as carriers prioritize financial survival over expansive flight schedules in a high-cost environment.
