As oil marketing companies hiked air turbine fuel (ATF) prices by 3.5% on Monday, Airlines are likely to raise fares to protect their margins. As per a report in Economic Times, Aviation analysts see a hike of 5-7% in fares due to the rise in oil prices.
Airlines, which raised fares last month by 100-200 on increased fuel costs, are watching the situation very closely. Analysts feel that fare hike will protect margins of airlines. Airlines might pass on the 3.5% rise in ATF to consumers as it would be a good strategy to do so to protect their margins during this quarter. But the catch is that if fuel prices still rise upwards of $100, we will see a dent in demand in the long run.
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