Crude oil prices have risen to a seven-year high of nearly $140 a barrel in recent weeks as a result of ongoing conflict in Europe, Dutta said in a statement.

The price of aviation turbine fuel has risen 50 percent since January and the situation has had a negative effect on IndiGo, CEO Ronojoy Dutta said Wednesday.

He said the government should bring aviation turbine fuel (ATF) under the Goods and Services Tax (GST) and make flying affordable for consumers and viable for airlines.

IndiGo is India’s largest airline and has a market share of approximately 55 percent of the domestic passenger market.

Crude oil prices have risen to a seven-year high of nearly $140 a barrel in recent weeks as a result of ongoing conflict in Europe, Dutta said in a statement.

“This has resulted in a price increase of more than 50 percent of the ATF from January 2022 to date, including the 18 percent increase today,” he noted.

This situation is negatively impacting us, as ATF accounts for more than 45 percent of our operating expenses, he said.

“We are in talks with the government to bring ATF under GST as it will bring the benefit of pre-taxation,” he noted.

IndiGo believes such measures are needed now more than ever to offset this cost increase and make flying feasible for airlines and affordable for consumers, he said.

“Tax rationalization will result in strong growth for the sector, creating a multiplier effect across the economy, and promoting trade, tourism and job creation,” Dutta noted.

Meanwhile, a Vistara spokesperson said airline tickets are a function of market dynamics and are determined by multiple factors, such as the balance between supply and demand, market sentiment and competition.

“The resumption of scheduled international flights from March 27 is expected to boost demand and we hope it will help the industry manage the surge in ATF prices,” he added.


This post IndiGo Negatively Affected by ATF Price Rise; government should bring it under GST: CEO Ronojoy Dutta was original published at “https://www.financialexpress.com/industry/indigo-adversely-impacted-by-atf-price-hike-govt-should-bring-it-under-gst-ceo-ronojoy-dutta/2463272/”

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