The dip in the air turbine fuel (ATF) price and the continuation of this trend will benefit the aviation sector, Civil Aviation Minister Jyotiraditya Scindia said on Saturday.
He said the fall in the ATF rates will have a good impact on airlines under pressure. "Prices of the ATF have come down. I feel this trend will continue and the aviation sector would benefit.
This will have a good impact on airlines that are under pressure. 50 percent of their cost structure is of (based on) ATF," Scindia told reporters in Madhya Pradesh. Notably, ATF prices have been coming down during the last few weeks after jumping to record levels, primarily due to the Russia-Ukraine war that began on February 24.
On August 1, the price of ATF in Delhi was Rs 1.21 lakh per kilo-liter, which was around 14 percent lower than last month. Scindia also said when the ATF price shot up three-fold the airfare was raised by just 20-25 percent.
“I have removed the fare band from August 30,” he said. The Union Aviation Ministry had earlier this week said that limits imposed on domestic airfares will be removed from August 31, after approximately 27 months.
The ministry had imposed lower and upper limits on domestic airfares based on flight durations when services were resumed on May 25, 2020, after a two-month lockdown due to the Covid-19 pandemic.