Shares of budget-held company SpiceJet fell 3.5 percent on Thursday after a company manager said air price increases were "unstable" and that air fares needed to be increased by at least 10-15 percent. In the BSE, SpiceJet stock fell 3.64 percent to keep trading at ₹ 42.40, as the global market and dangerous assets around the world rallied to resume deep trading in previous systems.
Ajay Singh, Chairman and CEO of SpiceJet, said on Thursday that the sharp rise in airline fuel prices (ATFs) and the fall in the rupee price have left local airlines helpless without increasing air prices immediately.
Aircraft fuel prices, which account for about 40 percent of airlines' operating costs, have risen sharply this year after nine consecutive increases.
A minimum increase of 10-15 percent is required for airfare to ensure that operating costs are better maintained. SpiceJet over the past few months has tried to absorb the huge burden of this increase in fuel prices, which makes up more than 50 percent of our operating costs, as we could have done, Mr Singh said in a statement.
"ATF prices have risen by more than 120 percent since June 2021. This sharp rise is not sustainable and governments, provinces and provinces, need to take urgent action to reduce taxes on the world's highest ATFs," he said. .
"The depreciation of the Indian rupee against the US dollar also has a significant impact on airlines as our major costs are dollars or connected to the dollar," added SpiceJet's CMD.
In April this year, ATF prices increased by 2 percent to Rs 1,12,924.83 per kiloliter. Later, on May 1, airline fuel prices rose 3.2 percent, followed by an increase on May 16.
But earlier this month, ATF prices were reduced by state-owned oil companies by Rs 1,564 per kiloliter, to reduce aircraft fuel costs to Rs 1,21,475 per kilometer from Rs 1,23,039 per kiloliter.
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