Jet Airways, SpiceJet, Kingfisher and other airlines will curtail services frequency and air routes to cut losses after oil companies raised the prices of aviation fuel. Because of this airlines may choose to fly less rather than fly more and lose more. The rationalisation of flights has already started on the short haul routes and will soon extend to the long haul ones. For an example, Spice Jet has cancelled around 15-16 short haul flights in the last two months and will look at pulling out long haul flights soon.

ATF comprises more than 45 per cent of the airline’s costs and this component will increase even more. The prices of ATF have been increasing much more than other petroleum products. Public sector oil companies announced on Saturday night, more than an 18 per cent average increase in the prices of aviation turbine fuel (ATF), which has finally resulted in an increase of 8-10 per cent in all ticket fares, with airlines such as Jet. Airways and Kingfisher announcing an increase of Rs 300 for short-haul sectors (under 750 kilometers) and Rs 550 for long-haul sectors (over 750 kms). State government will cut down sales tax upto 4 percent.According to civil aviation a relaxation in norms for flying abroad would be sought even more strongly, so that airlines opting out of domestic routes could expand their operations internationally.

Categories: Business
Tags: Airlines, Jet, Petrol, petroleum