Jet fuel prices increased by 18% reaching an all-time high

Jet fuel prices on Wednesday, March 16 were hiked by over 18% - the steepest ever increase - to all-time high levels after international oil prices surged to a multi-year high. The increase is the sixth straight this year - led to prices soaring past the INR 1-lakh-per-kilolitre mark for the first time.

Aviation turbine fuel (ATF) - the fuel that helps aeroplanes fly - was hiked by 17,135.63 per kl, or 18.3%, to INR 110,666.29 per kl in the national capital, according to a price notification by state-owned fuel retailers.

Jet fuel prices are revised on the 1st and 16th of every month based on the average international price of benchmark fuel in the preceding fortnight.

Jet fuel prices were hiked by over 18% - the steepest ever increase - to all-time high levels after international oil prices surged to a multi-year high.

International oil prices had climbed to a 14-year high of near USD 140 per barrel last week on fears of supply disruption following Russia's invasion of Ukraine. Rates have since mellowed to around USD 100 per barrel.

In Mumbai, ATF price soared to INR 109,119.83 a kl and it costs INR 114,979.70 in Kolkata. Jet fuel is priced at INR 114,133.73 per kl in Chennai. Jet fuel, which makes up for almost 40% of the running cost of an airline, has this year surged to new highs.

The previous peak of INR 71,028.26 per kl was recorded in August 2008, when international crude oil prices touched USD 147 per barrel. Brent crude oil on Wednesday, March 15 was trading just above USD 100 per barrel.

ATF prices have increased every fortnight since the start of 2022

ATF prices have increased every fortnight since the start of 2022. In six hikes beginning January 1, ATF prices have been increased by INR 36,643.88 kl or almost 50%.

Brent crude oil, the best-known international benchmark, was at USD 82.74 per barrel on November 5, 2021, before it started to fall and touched USD 68.87 a barrel on December 1.

Globally, oil prices, which had traded lower early in the session, turned higher today, with Russia's invasion of Ukraine continuing to stoke volatile trade. Brent crude rose 1.26% to USD 101.17 per barrel, and U.S. crude added 0.93% to USD 97.34 per barrel.

As international flights resume from March 27, the Tata Group is all set to revamp Air India with the early focus being select international routes, CNBC-TV18 reported.

Tata Group plans to focus on expanding international routes. Its primary focus is expected to be expanding flights to the US market as regular international flights are set to resume from March 27.

Air India is looking at adding more flights and new destinations in the United States - a key area of interest at present as the Ukraine-Russia war affects several airlines.

Air India to concentrate on expansion of its US routes

Expanding new routes will help present a new experience, sources told CNBC, as the Tata Group looks to turn around the airline after taking over the loss-making company from the government after 69 years.

Airspaces over Ukraine and Russia have been affected due to the raging war between the countries, leading to airlines taking longer routes to reach destinations. This has increased fuel and operational costs. This has piqued the Tatas’ interest who are keen on starting more routes as United Airlines and others take a backseat.

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Air India, however, is yet to finalise a CEO.

Air India, however, is yet to finalise a CEO. Tata Sons chief N Chandrasekaran and a five-member core committee will be leading the operations till Air India gets a new CEO, CNBC reported quoting sources. Chandrasekaran was appointed Air India Chairman on Monday, March 14.

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Another key development is that Singapore Airlines (SIA) is open to considering the merger of synergies between Vistara and Air India. However, SIA told CNBC, "Singapore Airlines does not comment on any confidential discussions it may or may not be having."

SIA has a 49% stake in Vistara, a joint venture between Tata Sons and Singapore Airlines.

The Tata Group acquired Air India back from the government with a winning bid of INR 18,000 crore. The Tatas would pay INR 2,700 crore cash and take over INR 15,300 crore of the airline’s debt. The takeover of the airline was completed on January 27.

(With Inputs from CNBC TV18)

IndiGo started flights between India and Thailand from Tuesday, March 15 onwards after two years, a statement said.

Thailand is opening its borders nearly two years after it restricted entry for tourists in March 2020, the airline's statement noted. The country reopened its border to vaccinated travellers from every country on February 1 this year, it mentioned.

ALSO READ - Thailand relaxes entry restrictions as Covid fear fades

Indigo resumes flights between India and Thailand after 2-year hiatus

The airline said it will operate the Thailand flights under the air bubble agreement till March 26 and thereafter as part of its scheduled commercial international operations.

"The flights will connect Bangkok with Delhi, Mumbai, Kolkata, Chennai and Bengaluru and Phuket with Delhi and Mumbai," it stated.

“We are pleased to resume operations between India and Thailand with flights to Bangkok and Phuket as per the guidelines issued by the ministry of civil aviation. Thailand is one of the favourite tourist destinations for Indians and the resumption of services will surely bring cheer and affordable flying options for those planning summer travel to international destinations. These flights will not only bring down airfares on these routes but also promote trade tourism and mobility, giving a fillip to economic recovery in both the countries."William Boulter, Chief Commercial Officer, IndiGo

Earlier this month, the Centre had announced that scheduled commercial international flights will resume in India from March 27.

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The Kolkata-Bangkok flight started operating on Tuesday, March 15 the airline stated. "Fully vaccinated foreign travellers from India can enter Thailand without quarantine," the airline mentioned.

According to the new rules, travellers will need a negative PCR lab result before arrival and two more PCR tests after landing one upon entry and another on their fifth day in Thailand, it noted.

Thai Airways has also resumed flights between the two countries under the air bubble arrangement.

Thai Airways, in the meantime, has also resumed flights between the two countries under the air bubble arrangement. The national carrier of Thailand initiated flights between Bangkok and Kolkata, Delhi, Chennai, Bengaluru, and Mumbai, from March 1, 2022.

Vistara is also launching flights between Delhi and Bangkok effective March 27, 2022, onwards. They will operate a flight using their A320 aircraft. Here is the schedule for Vistara’s planned operations in Bangkok.

The Goods and Services Tax (GST) has been slashed from 18% to 5% on domestic maintenance, repair and overhaul (MRO) services for the aviation sector, the government announced on March 14.

The industry players had long been demanding the government to reduce the GST rate on aircraft MRO services. The reduction in tax rate is expected to accelerate the pace of setting up MRO services in India.

The expansion of the MRO sector is expected to assist in employment creation as the industry is labour-intensive. Like other industries such as information technology, where India has become the back-office of the world, certain tweaks in taxation could see aircraft fly to India for MRO visits, experts have claimed.

GST rate on domestic MRO services for the aviation industry reduced to 5% from 18%

Civil Aviation Minister Jyotiradiya Scindia, while speaking on India’s new policy for aircraft MRO services in September 2021, said the ministry plans to implement an allotment process for MROs via open tender and that it will provide allotment for 30 years to provide a stable ecosystem for investors.

The aviation ministry is trying to attract private investment for MRO at 8 airports, Scindia had noted.

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The Ministry of Civil Aviation, while announcing the reduction in the GST rate on MRO services today, also noted that the "issue of reduction of Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) has been taken up with the states and the UTs.

11 States/UTs have reduced the VAT on ATF to below 5%

"The following 11 States/UTs have reduced the VAT on ATF to below 5%: Andaman & Nicobar Islands, Dadar & Nagar Haveli and Daman & Diu, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir,  Ladakh, Madhya Pradesh, Tripura, Uttar Pradesh and Uttarakhand, the statement added.

In the written reply in Lok Sabha, Minister of State for Civil Aviation General (Retd) V K Singh said that the average number of passengers carried in the pre-COVID financial year (2019-20) was around 4 lakh per day. On 6th March 2022, domestic airlines in India carried around 3.7 lakh passengers.

The minister also noted that the Government of India has accorded 'in-principle' approval for setting up 21 greenfield airports across the country. So far, eight greenfield airports namely, Sindhudurg and Shirdi in Maharashtra, Durgapur in West Bengal, Pakyong in Sikkim, Kannur in Kerala, Orvakal in Andhra Pradesh, Kalaburagi in Karnataka and Kushinagar in Uttar Pradesh have been operationalised.

A conducive aircraft leasing and financing environment has been enabled

The minister also informed that a conducive aircraft leasing and financing environment has been enabled and improvement in air navigation infrastructure at Indian airports is being carried out.

The government has taken several measures to meet the increasing demand in the aviation sector. They include the Airports Authority of India (AAI) developing both new and existing airports over the next five years, with a projected capital outlay of INR 25,000 crore.

The development work will include constructing new terminals, expanding and modifying existing terminals, expanding and/or strengthening existing runways, aprons, Airport Navigation Services (ANS) infrastructure, technical blocks, control towers etc.

The government has also enabled a conducive aircraft leasing and financing environment.

For the airports at Delhi, Hyderabad, and Bangalore, public-private partnerships (PPP) are undertaking expansion projects worth INR 30,000 crore by 2025. A further INR 36,000 crore has also been planned to develop new greenfield airports.

Further, under the Regional Connectivity Scheme (RCS), 403 routes that connect 65 airports have been operationalised as of January 31, 2022. The government has also enabled a conducive aircraft leasing and financing environment.

Private airlines are choosing not to use aerobridges for boarding and deboarding an aircraft to save money and therefore, aged people are bearing the brunt as they have to use stairs, a Parliamentary committee stated on Monday, March 14.

"The Committee deplores this apathetic and unreasonable attitude of the private airlines," its report said, adding that such carriers should be penalised by the Ministry of Civil Aviation.

Aerobridge is a moveable tunnel that is extended from the airport building to the aircraft for boarding or deboarding passengers. Airlines have to pay a certain charge to the airport for using aerobridge facilities.

Private airlines in India are choosing not to use aerobridges for boarding to save money

A report of the Parliamentary Committee on Transport, Tourism and Culture were tabled in Rajya Sabha on Monday, March 14 wherein it said that despite having aerobridges in some of the airports, the airlines are not using them for boarding and deboarding the passengers and are instead using staircases.

"Despite charging passengers, aerobridge facilities are not being used by private airlines to reduce operational cost," it mentioned. Due to this, passengers especially the aged ones have to bear the brunt and climb the stairs of the parking stand to board an aircraft, it noted.

"The committee deplores this apathetic and unreasonable attitude of the private airlines and strongly recommends that its circular on the aforesaid subject may be strictly enforced," it mentioned.

Airlines have to pay a certain charge to the airport for using aerobridge facilities.

The Ministry of Civil Aviation had in 2018 issued a circular to all Indian airport operators stating that if an aerobridge is available for boarding and deboarding passengers, it must be used for their convenience.

The Committee recommended that the ministry should conduct regular surprise checks to ensure compliance with their circular and "in case there is a default, the concerned private airlines should be penalised".

Stating that different airlines were charging varied fares for the same distance and duration, the panel asked the Union government to ensure that the passengers are “not fleeced in the garb of commercialisation”.

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It also described the airlines’ decision to charge extra money for selecting seats as “arbitrary and unjustifiable”.

The committee agreed that the civil aviation sector grows in an open market and private players should be given a free hand. However, it said that the Aircraft Rules, 1937, specifically mentions that the fares should be reasonable and should maintain reasonable profit.

“In the above context, the committee feels that the reply of the ministry stating that air travel is purely a contractual matter between the airline and the passenger, is not at all justified,” it said. “The committee believes that a balance also must be maintained between commercial interests of the airlines and the interests of the passengers.”

SpiceJet on Monday, March 14 said it will launch 60 new domestic flights this summer. The summer schedule starts on March 27 and ends on October 29.

In a statement, the airline said it will launch eight industry-first flights, which will operate on the Gorakhpur-Kanpur, Gorakhpur Varanasi, Jaipur-Dharamshala and Tirupati-Shirdi sectors, in the summer schedule. The airline will be deploying its Boeing 737 and Q400 aircraft on these routes. 

SpiceJet to add 60 new domestic flights this summer

SpiceJet has also announced a host of new flights, strengthening its domestic network. Some of the routes include Kolkata-Kushinagar-Kolkata, Guwahati-Durgapur-Guwahati, Varanasi-Jaipur-Varanasi, Hyderabad-Jabalpur-Hyderabad, Bengaluru-Thiruvananthapuram–Bengaluru, Chennai-Bagdogra-Chennai, Tirupati-Pune-Tirupati amongst a host of other flights.

"The airline has added 60 new domestic flights to its schedule, including seven UDAN flights, eight industry-first flights, new connections and additional frequencies," it said.

“We are excited to launch new flights and further strengthen our domestic network. We believe the time is ripe to expand as travel demand is picking up and the aviation sector is ready to embrace new opportunities to make a stronger comeback. We hope our new flights, including those under UDAN, in the upcoming Summer Schedule will positively contribute in meeting the robust travel demand and give the sector the impetus to reach newer heights.Shilpa Bhatia, Chief Commercial Officer, SpiceJet

Under the UDAN scheme, financial incentives from the Centre, state governments and airport operators are extended to selected airlines to encourage operations from unserved and underserved airports and keep airfares affordable.

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Indian carriers have increased their domestic services by 10.1% to 25,309 weekly flights in the upcoming summer schedule as compared to 22,980 last season, aviation regulator DGCA had said on March 11.