Vistara chief says air fare hike inevitable

Recently SpiceJet said that a minimum increase of 10-15% in airfares was "required" as ATF prices have increased by 120%

June 20, 2022 08:28 am | Updated 08:42 am IST - DOHA

File photo for representation

File photo for representation | Photo Credit: Reuters

An increase in airfares is "inevitable" and Vistara will also raise them if other airlines do so, its CEO Vinod Kannan said on Sunday.

"The ATF prices have been increasing and our fares have also been increasing. As part of the overall market, we do look at market fares. We don't operate in a vacuum and if other airlines increase fares and if the function of supply and demand is there, fares will increase," he was speaking to journalists in Doha where over 100 airlines are gathered for IATA’s Annual General Meeting.

He said that the increase in ATF means that fuel costs now account for up to 40-50% of total costs for Indian airlines.

Recently, SpiceJet's Chairman and Managing Director Ajay Singh said that a minimum increase of 10-15% in airfares was "required" as ATF prices have increased by 120% since June last year.

While the airfares till June were backed by a strong travel demand, Mr. Kannan said that it remained to be seen whether an increase in ticket prices now will dent passenger sentiment during the traditionally lean travel season between July and September.

Though the government has prescribed an airfare band with minimum and maximum airfares for travel within 15 days of booking, Mr. Kannan said more and more people were now booking more than 15 days before the date of journey as the uncertainty around travel due to restrictions and various protocols is gradually waning.

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