SpiceJet Ltd., an Indian low-cost carrier, announced on Thursday that it was increasing fares by as much as 15% to combat high fuel prices and a depreciating rupee, which it claims are making the cost of operations unsustainable.
Since June 2021, the cost of aviation turbine fuel has increased by more than 120 percent. This enormous increase cannot continue, “Ajay Singh, the managing director of the airline, urged both the federal and state governments to reduce taxes in a statement.
Airlines with significant costs that are expressed in or pegged to the US dollar are “significantly” impacted by the fall in the value of the Indian rupee, according to Singh.
Given that fuel accounts for more than half of an airline’s operational costs, he added, “We believe that a minimum 10 percent -15 percent increase in fares is required to ensure that cost of operations are better sustained.”
This week, the rupee hit a record low against the dollar of 78.28, representing a loss of almost 5% so far this year. Global consumer prices have increased as a result of rising crude oil and commodity prices since Russia invaded Ukraine in February.