Airfares likely to go up as jet fuel prices hiked by 6.9%

Jet fuel prices have been hiked by a steep 6.9 per cent, the fourth hike since June this year due to the sharp fall of the rupee. Though airlines may not immediately hike the air fares, they could be tempted to go for an increase from October, when the festival season starts.

Jet fuel constitutes over 40 per cent of an airline's operating costs. Since the air passenger traffic growth in the last few months has been flat, airlines could wait for the start of the festival season to hike fares. Domestic airlines carried 31 million passengers during January to June of this year, slightly higher than 30.91 million during the corresponding period of the previous year, as a slowing economy hit the demand for air travel.

Aviation Turbine Fuel, or ATF, price in Delhi was hiked by Rs 4,827.94 per kl, or 6.87 per cent, to Rs 75,031.09 per kl, according to Indian Oil Corp, the nation's largest fuel retailer. The increase has been effected from September 1.

The three fuel retailers - IOC, Hindustan Petroleum and Bharat Petroleum - revise jet fuel prices on the 1st of every month, based on the average international price in the preceding month.