Just last week, the domestic budget carrier, Indigo, said in an earnings call that the increasing value-added tax (VAT) on aviation turbine fuel (ATF) can act as an inflationary catalyst for the aviation firm. What adds fuel to the fire is the soaring airport fees.”Currently, we are experiencing a higher inflationary environment… it is across the board, we are experiencing. Nonetheless, we are looking at ways to control the costs,” Indigo said in its port-earnings call, also suggesting that the rising fleet might help to counterbalance the surging expenses. Meanwhile, nearly 13 airports across India, have increased their UDF (User development fees), which refers to the charges imposed by airports on airlines to fund the development, expansion and other broader infrastructure projects/upgrades.All these factors combined are putting strain on India’s aviation sector and it’s likely that travellers might feel the pinch in their wallets. In June month, Aviation Minister Kinjarapu Ram Mohan Naidu also highlighted the issue of rising air fares. “Since the time I have been announced as Civil Aviation Minister. Wherever I go, people have been mentioning that the prices have somehow increased over the last few years, especially after Covid. I need a thorough understanding of the issue, so, I am going to sit with the stakeholders,” he said.
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