Oil prices fall to $70: Will your next flight cost less? Here's what government said

As global crude oil prices retreat towards pre-conflict levels, the Centre has hinted at the possibility of lower airfares in the future by asking airlines to review fuel-related surcharges if the decline in aviation turbine fuel (ATF) prices is sustained.

Speaking to reporters on Thursday, Union Civil Aviation Minister K Ram Mohan Naidu said the government is closely monitoring ATF prices and is in discussions with airlines to assess whether the recent fall in fuel costs represents a lasting trend or only a temporary correction.

Airfares had risen sharply in recent months after global crude oil benchmarks surged past the $100-per-barrel mark, pushing up ATF prices and prompting airlines to impose additional fare components and surge charges.

Now, with crude prices hovering around $70 per barrel, questions have emerged over whether travellers can expect cheaper flight tickets in the coming months.

What Union Minister said?

Addressing these concerns, the minister said the government would first evaluate whether the reduction in fuel prices remains consistent before initiating discussions on lowering additional airfare charges.

"Secondly, now that we are seeing prices coming down, we still have to see if this is a long-term reduction or if it is sudden, and we are talking to the airlines on this," the minister said.

Naidu noted that the past few months had been particularly significant for India's aviation industry, making it important to avoid premature decisions based on short-term fluctuations in crude oil prices.

"The last 4 months have been very important for the airlines... Once we are clear that price stability will continue for a long time, we will talk to them and work towards reducing the surge charges or the extra prices we are seeing right now," Naidu told news agency ANI.

At present, aviation turbine fuel prices are revised every fortnight in line with movements in international crude oil prices. Since fuel accounts for a substantial share of airline operating costs, any sustained decline in ATF prices has the potential to reduce pressure on carriers and eventually influence ticket pricing.

The minister also highlighted the Centre's efforts to shield the aviation sector from volatility arising out of geopolitical tensions in West Asia.

"In the case of ATF, we have also provided a price stabilisation fund of ₹10,000 crore."

He added:"So you can see how important the Indian government is considering this issue right now."

According to the government, a ₹10,000 crore price stabilisation fund has been created to support airlines during periods of financial stress linked to the ongoing West Asia crisis.

Apart from the stabilisation fund, the Centre has introduced a series of measures aimed at easing the financial burden on airlines. These include capping ATF prices for domestic scheduled operators, reducing airport charges and extending assistance under the Emergency Credit Linkage Scheme.

While the government's remarks have raised hopes of lower airfares, no immediate reduction has been announced. Officials indicated that any move to review surge charges would depend on whether aviation fuel prices remain stable over a longer period.

For now, the Centre continues to monitor developments in the global oil market while consulting airlines before taking any decision on fare-related components.