The longer your flight more you pay for tickets from today. Here's why

With shifting costs and often unstable deals, exploring the world of air travel, particularly after the pandemic, may be challenging. IndiGo, the biggest airline in India, has made the decision to impose a “fuel charge” depending on distance for all domestic and international ticket reservations starting Friday. The fuel tax will vary between Rs 300 and Rs 1,000 per sector, per the information provided by the airline, and will depend on distance slabs. The decision was made in response to the recent sharp increase in the price of aviation turbine fuel (ATF). Let’s take a closer look. Also read: Rs 21,000 to fly from Delhi to Ahmedabad: Why are airfares in India soaring? IndiGo introduces a fuel surcharge Issuing a statement, IndiGo said, “Under this pricing structure, passengers booking IndiGo flights will incur a fuel charge, per sector, based on the sector distance.” For fuel, IndiGo would charge Rs 300 for trips under 500 km, Rs 400 for distances between 501 and 1,000 km, Rs 550 for trips between 1,001 and 1,500 km, Rs 650 for trips between 2,501 and 2,500 km, Rs 800 for trips between 2,501 and 3,500 km, and Rs 1,000 for trips more than 3,500 km. With this update, a flight from Bengaluru to Mumbai will incur a fuel surcharge of Rs 400, while flights from Bengaluru to Delhi and Bengaluru to Kolkata will incur a surcharge of Rs 650. “IndiGo remains committed to offering affordable fares to its valued customers. IndiGo will also publish the tariff sheet subsequently, with the sector-wise charge that can be viewed on http://www.goindigo.in,” the carrier added. The airline did not state if it would examine the fuel fee on a regular basis to reflect changes in the price of ATF made by oil marketing corporations (OMCs). The reason The carrier said, “The decision follows the significant increase in aviation turbine fuel (ATF) prices. ATF accounts for a substantial portion of an airline’s operating expenses, necessitating fare adjustment to address such a cost surge.” This is not the first time the airline has imposed a fuel surcharge because of high ATF costs. [caption id=“attachment_13210922” align=“alignnone” width=“640”] This is not the first time the airline has imposed a fuel surcharge because of high ATF costs. PTI[/caption] The airline introduced a fuel fee in May 2018 to offset the impact of rising oil and ATF prices as well as rupee depreciation on costs. With a domestic market share (measured in passengers carried) of more than 60 per cent, IndiGo is India’s largest airline. It posted a net profit of Rs 3,090 crore for the months of April through June, the highest quarterly profit. The airline has a fleet of more than 320 aircraft and flies to 81 domestic and 32 overseas destinations on more than 1,900 daily flights. Also read: Is opening emergency door in aircraft a crime? Tejasvi Surya's latest controversy explained Fuel surcharge Informally known as “carrier-imposed surcharges,” a fuel surcharge is the collective term for additional taxes that some airlines levy on top of the base fare. Each airline chooses this arbitrary price, which is typically based on the route. Airlines who wish to impose a fuel surcharge on customers must explain to them how it is determined and how it is “based on the carrier’s actual paid enplanements and fuel expenditures.” ATF price hike On 1 October, the cost of ATF, or jet fuel, for domestic aircraft increased by five per cent, reaching its highest levels of the year. The monthly price increase, which is the fourth one in a row as a result of the surge in the price of crude oil and jet fuel internationally, is likely to have put further pressure on airlines. Notification of price changes from state-owned fuel dealers shows that ATF prices increased by 8.5 per cent in August and 1.65 per cent in July. For airlines, ATF represents the single-largest cost, and for Indian carriers, it represents more than 40 per cent of their operating costs. Prices for ATF are deregulated and determined by market pricing. According to data from the nation’s largest OMC Indian Oil Corporation (IOC), jet fuel prices have increased by almost 32 per cent since June, and the present price levels are the highest since November of last year. Given the situation, rising jet fuel prices might make traveling even more expensive. According to statistics provided by IOC, jet fuel is currently priced at Rs. 1,18,199.17 per kiloliter in Delhi, Rs. 1,10,592.31 in Mumbai, Rs. 1,26,697.08 in Kolkata, and Rs. 1,22,423.92 in Chennai according to the most recent price increase. Due to variances in the state-imposed levies, ATF costs vary across the nation. Although its price has significantly decreased over the previous few days, the global benchmark Brent crude traded at above $90 (Rs 7490.22) per barrel during the majority of September. Margins on different fuels also firmed up in the global market along with crude oil, which serves as the base for petroleum fuels like jet fuel. Given the increased global demand for fuel as aviation traffic returns to pre-pandemic levels, the forecast for ATF margins has been particularly positive. Also read: What is GPS spoofing and why is it a concern for Indian airspace? Other airlines, too, may increase prices Industry insiders have been predicting higher airfares during the approaching festival season because to the recent spike in jet fuel prices, which often results in a jump in travel demand. A top executive of a rival airline, told Deccan Herald, “I guess all airlines will follow IndiGo’s actions.” A spokesperson for IndiGo told Mint this week that a rise in demand is anticipated in the quarter as people travel during the busiest wedding season, observe Durga Puja and Diwali, visit friends and family, and return to their hometowns. Additionally, in many parts of the world, it falls during the protracted Christmas and New Year vacations. “Interestingly, in today’s times, we also see a new travel trend emerging. While traditionally, some people prefer to stay home during these festivities, there are now others who prefer to fly to beaches and mountains. In my view, this indicates a change in people’s travel patterns compared to prior times,” the spokesperson added. Although airlines haven’t been able to add a lot of space, the demand for travel during the festival season is expected to be much higher than it was last year. With inputs from agencies