InterGlobe Aviation Ltd, operator of IndiGo, may increase airfares to offset rising costs, its Managing Director Rahul Bhatia said, amid a massive surge in aviation turbine fuel (ATF) costs.
“For us, it is very clear that we need to take fares up to protect ourselves against some of these additional costs that are showing up. For the moment, what we are discovering is that the fares are sticking. The demand is there,” Bhatia said.
He added, “You obviously have to take the pricing up to the point where you start to see elasticity come in. For the moment, what we are seeing is as we take the fares up, the market is inelastic to these hikes in fares. We just deal with this on a daily basis and see where we go.”
Bhatia said that since March, the escalation of geopolitical conflict in the Middle East has disrupted several routes and led to a sharp increase in jet fuel prices.
In response, airlines worldwide, including IndiGo, have had to take short-term measures to protect operational viability, he said.