00:00of stopping operations and this is due to the high cost of fuel prices.
00:04The West Asia crisis has now rung alarm bells in India's aviation industry
00:09with several airlines saying they're on the verge of stopping operations
00:13and this is due to the high cost of fuel prices.
00:16At least three airlines, including Tata-owned Air India,
00:20have asked the government to revise the price of aviation turbine fuel,
00:23which adds to about 40% to an airline's operating cost.
00:28Well, let's now go across to our reporters, Danish Anand,
00:31joining us from NDTV Prophet, also Tanushka joining us.
00:35Tanushka, first, can you tell us about this SOS that has been sent out by these three airlines
00:41saying that they're on the verge of stopping operations
00:44and are in dire need of the government's assistance?
00:51Precisely, Gargi, as you rightly mentioned and put it,
00:54it is an SOS call from the airlines that has gone off to the Ministry of Civilization
00:58This is namely Air India, Indigo and Spice Jet, who have written letters to the government
01:03requesting them to put a rational pricing system on into the aviation turbine fuel prices.
01:10Remember, because of the ongoing West Asia conflict,
01:13the prices of ATF has been skyrocketing across the months.
01:17As we speak currently, the price globally is that of $180 per barrel.
01:22However, the Indian government, that is the Ministry of Civilization,
01:26had put a bar on this hike.
01:28That means, for domestic operations, the highest ceiling was that of 25%.
01:32But it is becoming difficult for them to operate with such a rise in prices,
01:37even despite the ceiling.
01:39And the airlines have written to the ministry seeking relief and refuge in terms of rational pricing,
01:45which basically means that they want a crack band mechanism on the pricing.
01:50This was last done in October 2022, when the prices had seen a hike.
01:55Remember that the ATF amounts for 40% of an airline's operating cost.
02:01And excise duty also adds on in manifold to this operating cost,
02:06which is also something that the airlines are seeking relief regarding.
02:09Currently, the excise duty cost is at 11%.
02:12And this is also what the airlines are requesting to be lowered going forward.
02:16Remember that, you know, last month, the prices for domestic ATF per litre rose by Rs.15.
02:26And for international operations, however, it rose by Rs.73.
02:30So, definitely at this point, these are, you know, the exact exemptions and the relief
02:37that the Federation of Indian Airlines is also seeking from the Ministry of Civil Aviation.
02:42They've written a letter in which they've said that, you know,
02:45if there does not come in some sort of rules or some sort of sealing or a crack band kind
02:52of a mechanism on these pricing,
02:54then airlines will be compelled to slowly, gradually stop their operations.
02:59Back to you.
03:00Right, absolutely.
03:01Tanushka and Danish, this is a big crisis, especially, you know, we're saying three airlines.
03:05But let's face it, Air India and Indigo are the domestic airlines that we have facing massive losses,
03:13asking the government for some relief.
03:15Can the common man expect that we're going to see, you know, ticket prices going up?
03:22Well, that's correct.
03:23Earlier in the day, NDTV Prophet has explicitly reported that the airlines are already working on the measures
03:28that they are expecting to take from May.
03:30As of now, the airlines in India are on a wait-and-watch mode
03:33and they are waiting for the May ATF price revision, which will take place on the 1st of May.
03:37The airlines believe that M to, you know, continue their operations.
03:42Besides that, what NDTV Prophet has learned from sources is the fact
03:46that the airlines are preparing for all kinds of scenarios.
03:49Like right now, there is a 25% cap on domestic ATF prices
03:53and just in case if this cap is completely removed,
03:56then we can expect massive flight cancellations
03:58or if this cap of 25% is reduced, say, in a range between 15% to 20%,
04:04then that might not lead to major flight cancellations.
04:07But the airlines can recalibrate certain routes
04:10and the airlines as of now are, you know, ready to cut certain short-haul routes.
04:15They're also ready to cut flying operations on those routes
04:18which have low load factors and that have like really less passengers on board.
04:25So, these could be certain sectors that can see flight cancellations.
04:29But as far as the ticket price is concerned,
04:31well, that can go up if the capacity of the airlines get reduced
04:34because then we'll come back to the normal demand and supply mathematics
04:39because if the demand is higher and the supply is less,
04:42then we can expect the ticket prices to cross
04:44and hence the Federation of Indian Airlines which represents Indigo, SpiceJet and Air India,
04:50they have written to the civil aviation secretary
04:52requesting them to work on the price crap mechanism
04:56and basically the crack spread that is there,
04:59it is kind of the price difference when it comes to the oil prices
05:04and the final product that is the ATF.
05:06So, that is that difference that the airlines feel
05:09they are crossing the $12 to $22 per barrel mark
05:12and that is becoming really unsustainable for the airlines to continue.
05:16Alright, thanks so much Danesh and Tanushka for joining us.
05:19A real, you know, concerning crisis there with three airlines
05:22writing to the government claiming
05:23that they're on the verge of, you know, slowing down operations given.
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