Explained | How will rising ATF prices affect the aviation industry amid tapering demand and concerns of a third wave?

Explained | How will rising ATF prices affect the aviation industry amid tapering demand and concerns of a third wave?

Market experts said that it would still be difficult for airlines to pass increased operating costs on to passengers due to competition and fear of losing out on market share.





January 04, 2022 / 02:20 PM IST





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Just when it looked like things were looking up, the Indian aviation industry has once again run into turbulence with the outbreak of the Omicron variant of COVID-19 hitting demand and oil marketing companies also increasing the price of aviation turbine fuel (ATF), the biggest cost component for airlines

Oil marketing companies hiked ATF prices by around 3 percent this month after two price cuts in December. The price of ATF had peaked at Rs 80,835.04 per kl in mid-November before it was cut on December 1 and 15 by a total of Rs 6,812.25 per kl or 8.4 percent. The hike is likely to hurt airlines as rising costs will add to their woes at a time when they are struggling to fill seats.

“The hike in ATF price is a huge hindrance to the revival of the sector. Especially at time when demand is already taking a backseat due to rising concerns of a third