But flight tickets could soon cost more as the combined pressure of rising jet fuel prices and falling rupee has reached a point where airlines need to pass on this hike in operating cost to passengers in terms of higher fares.
IndiGo CEO Ronojoy Dutta said, “In pre-pandemic times, we had about 1,600 daily flights of which 400 to 450 were international. Currently, we have about 1,400 daily flights of which nearly 80 are international. (These numbers vary from lean to peak travel days.) The peaks are looking good. The government has allowed 100% domestic capacity and our bookings at this time are 90-95% of pre-Covid levels.”
But the incessant rise in aviation turbine fuel (ATF) or jet fuel prices and fall in rupee could now force airlines to increase fares to avoid going bust.
“Crude has gone from $43 a barrel last October to $84 now. We need some relief on taxes. Fares need to reflect higher fuel price, higher operating cost (added to by the falling rupee). Fuel is a problem and fares have to be brought higher,” Dutta said.
“Airlines around the world got some government help. We didn’t get any, which is fine. But excise on fuel (11%) and other indirect taxes in India are very high. Airlines pay 21% indirect tax and this is effectively the highest for any industry in India because we don’t get input tax credit on fuel. This needs to be softened as we are a critical infra player,” Dutta said.
Meanwhile, preparing for competition from Tata-Air India, IndiGo has ordered new “improved, softer and more comfortable seats” for its entire fleet. “The order has been placed for the new seats,” Dutta said.
IndiGo is going to start getting the Airbus A321 XLR (extra-long range) on which it will do up to seven-hour non-stops to cities like Tel Aviv, Milan and Dusseldorf. It is finalising the product for these flights that will include the new seats, ovens for hot meals and in-seat plug sockets so that passenger their keep personal electronic devices charged during the journey.