New Delhi: Domestic air carriers on Tuesday said that they would study the impact of the hike in aviation turbine fuel (ATF) price on their operational costs before taking any decision to increase airfares.
"We will examine the impact of the latest hike and take a call," Kingfisher Airlines spokesperson said.
Similar views were expressed by officials of other air carriers like Jet Airways and SpiceJet.
Fuel costs amount to almost 40-45 per cent of the total operational cost of the airlines in India.
The continued hike in aviation fuel prices last year saw airlines increase fuel surcharge, raising the ticket prices substantially. This, in turn led to a drop in number of passengers carried by domestic airlines, causing further financial distress to them.
However, with the decline in fuel prices in the last few weeks of 2008, the airlines went back on their competitive mode announcing lower fares to bring back air travellers.
The state-run oil firms hiked ATF price by more than six per cent on firming international oil prices.
Indian Oil, Bharat Petroleum and Hindustan Petroleum raised ATF price by Rs 2,306 to Rs 38,558 per kilolitre in Delhi effective Tuesday midnight, an IOC official said.
The hike comes on back of over 12 per cent hike on June 15. ATF price on that day were raised by Rs 3,949 to Rs 36,252 per kilolitre in Delhi.
International crude oil prices have firmed to a seven-month high of $72 per barrel on hopes of demand revival in US.
The three state-run retailers had from June 1 raised jet fuel rate by an average of Rs 108 per kl, which came on the back of a 1.8 per cent hike in rates on May 16.
In Mumbai, home to the nation's busiest airport, the rate will go up from Rs 37,367 per kl to Rs 39,789 per kl. The rise in ATF price, which constitutes 40 per cent of airlines' operating cost, may further put pressure on cash-strapped domestic carriers.
No comments from any of the leading airlines were immediately available on the latest price hike. Jet fuel in Kolkata will be dearer at Rs 46,711 per kl from Rs 44,289 per kl, while in Chennai the price has been raised by Rs 2,500 per kl to Rs 42,524 per kl.
ATF prices had peaked to Rs 71,028.26 per kl (in Delhi) in August last year on international crude prices touching a historic high of $147 a barrel. But subsequently the rates had come down, slashed every month till October and twice a month from November.
The three firms, which revise jet fuel rate every fortnight based on trends in international markets, had on April 16 increased ATF rate by about 6.7 per cent. This was followed by a marginal reduction in rates by one per cent on May 1.
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