Indian low-cost airline SpiceJet called on Thursday for a 10-15% increase in airfares to support its operation, in the wake of rising fuel prices and depreciation.
Ajay, SpiceJet Chairman and Chief Managing Director (CMD), said Thursday that there is no alternative to increasing airfares by 10-15 percent to meet airline operating costs. He emphasized on the continuing trend of weakening Indian rupees (USD) against the US dollar (USD), and the rising prices of air turbine fuels (ATF).
Singh stated that domestic airlines have been forced to increase fares due to the sharp rise in jet fuel costs and the decline of Rupee. We believe that an increase of 5% to 10% is necessary in order to maintain a lower cost of operation.
SpiceJet Chairman, further emphasized on the multiple ATF price rises within a single year and stated that “Aviation Turbine Fuel Prices have increased by over 120 percent since June 2021.”
Singh asked the government for a reduction in taxes on jetfuel (ATF), saying that increasing aviation fuel prices is a burden on airlines.
“The huge increase in ATF cannot be sustained and both central and state governments must take immediate action to lower ATF taxes. He said that we have been trying to absorb the fuel price increase, which has amounted to more than 50% of our operational costs, over the past few months.
Singh also highlighted the issue regarding the weakness of Rupees in relation to the dollar.
He said that “the weakening Indian Rupee versus the USD significantly impacts airline operations as our substantial costs are either dollar-denominated, or pegged to dollar.”