Indigo Flight Ticket Price: Good news for air travelers! Indigo fares became cheaper by Rs 1,000
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Indigo Flight Ticket: The central government had reduced the windfall tax on domestic oil production on the first day of the year. Giving relief to struggling airlines, the tax on Aviation Turbine Fuel (ATF) has been reduced. The effect of this decision of the government is now visible on air fares. Airline Indigo (Indigo Airlines) has announced to stop charging fuel duty from Thursday following the reduction in aviation fuel prices. Airline ATF (Aviation Turbine Fuel) started charging fuel duty from the beginning of October 2023 after the surge in prices. It was removed from Thursday. According to the aviation company, fuel duty has been withdrawn due to the recent reduction in ATF prices. According to a statement issued by IndiGo, ATF prices continue to fluctuate…therefore we will continue to adjust our fares and its components to address any changes in prices or market conditions. The fuel charge was applicable on the airline’s domestic and international flights.
Why did the company increase the charges?
Due to the increase in the price of air fuel since August, Indigo had in the month of October announced to impose a fuel charge of up to Rs 1,000 in its air fares depending on the distance of the flight. ATF costs are the biggest expense for Indian carriers, consuming about 45 percent of their total revenue. Between June 1 and October 1, ATF prices in Delhi rose by 32.4 per cent to Rs 1.18 lakh per kiloliter (KL). Now, with the company’s decision to remove fuel charges, there will be a reduction in air fares ranging from Rs 300 to Rs 1000. Earlier, in May 2018, the airline was the first to impose fuel surcharge to compensate for the increase in ATF prices.
How much has the charge reduced?
The government has reduced the price of aviation fuel by Rs 4,162.5 i.e. 3.9 percent. After this cut, the price of aviation fuel in Delhi has become Rs 1,01,993.17 per kilolitre. This is the third consecutive month when the price of aviation fuel has been reduced. Earlier, in November, the price of ATF was reduced by about six percent (Rs 6,854.25 per kilolitre). Whereas in December it was reduced by 5,189.25 i.e. 4.6 percent. ATF accounts for approximately 40 percent of the operating cost of an airline.
Updates take place in 15 days
The windfall tax is revised every 15 days based on fluctuations in international crude oil and product prices. Earlier, on December 1, the government had announced reduction in windfall tax on crude petroleum from ₹6,300 per tonne to ₹5,000 per tonne. Additionally, during the last review on November 16, the government had reduced the windfall tax on crude petroleum by ₹3,500 from ₹9,800 per tonne to ₹6,300 per tonne. This was in line with the declining trend in global oil prices. Whereas, on November 1, the government had increased the tax on crude oil from Rs 9,050 per tonne to Rs 9,800 per tonne. Subsequently, duty on diesel exports was halved to ₹2/litre, while duty on jet fuel was abolished, bringing it down from ₹1/litre to zero.
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