Airfares might drop, as aviation fuel gets cheaper
Air travel is expected to become cheaper as the government has announced reduction in the prices of aviation fuel. Market experts believe that the prices of air tickets should drop to around pre-October levels from next month. The ATF (aviation turbine fuel) prices have dropped down by almost 5% as the international crude prices have gone down worldwide in the recent times.
Airline companies in India have hinted a price drop by around 10% after the new prices comes into effect from December 1. Indian Oil Corporation has announced a reduction in price of ATF by around Rs 2,000 a kiloliter. This is the second such drop in fuel prices in the last two months. This would bring some cheers to air travelers as holiday season has arrived and lot of traffic is expected during the last month of the year.
IOC had earlier dropped the prices of ATF by around Rs 700 (1.8%) earlier this month. However, considering the drop was marginal, airline companies did not announce any drop in the rates of air tickets. Considering fuel cost comprises 35% of the operating cost for airlines, this latest drop in prices should bring some cuts in ticket prices for the air travelers.