New Delhi:
Air India hiked passenger fares by up to 25 percent on all domestic routes today following a sharp increase in the price of air turbine fuel (ATF). It may also raise fares on international routes.
"We have hiked fares by 23-25 percent on all domestic routes. This has been done to off-set the recent increase in ATF price," an Air India official told IANS.
The rupee depreciation is also big concern for the airline, said the official, as it has affected the margins of its international operations.
"Going forward, there might be an upward revision in fares for international routes," the official said.
Currently, on domestic routes, Air India has a passenger load factor of 82 percent.
The official said the company was optimistic that it would maintain its market share despite the fare increase and that pre-booking by passengers had ensured a high load factor during the festive season.
Air India had the third highest domestic market share in July at 19.2 percent.
On Wednesday, Jet Airways raised fares by up to 25 percent. Budget carrier SpiceJet earlier increased fares by 25 percent.
The hikes come after the three state-owned oil marketing companies, which revise jet fuel prices on the first day of every month, hiked fuel prices by 6.9 percent for purchases from September 1. This was the fourth hike since June due to the fall in rupee value.
Fuel prices comprise about 50 percent of the operating costs of airlines in India and have dented the sector as major airlines bleed under the high state sales tax regime.
Currently, ATF sold in the country is nearly 50-60 percent costlier than in overseas markets like Bangkok, Singapore or Dubai.