The rise in fuel price is putting pressure on the margins of Indian Airlines and the carrier might consider hiking fares in the long run if the price rise continues.
"If aviation turbine fuel prices continue to rise, then we will need to talk to the government and think of some kind of fare restructuring," Sunil Arora, Chairman and Managing Director, Indian Airlines, said on Monday.
He, however, said the state-owned airline was not planning to raise its fares immediately. "We would like to wait and watch for a while," he said.
Indian Airlines had hiked airfares by 10 per cent early this year as a result of the higher price of fuel. In August this year the price of aviation turbine fuel reached Rs 27,000 per kilolitre from Rs 24,000 in April.
The national carrier had hiked its tariff this year when the cost of ATF was Rs 26,000 per kilolitre. In April, it had come down but has been on the upswing ever since.
Arora also said that the company will have to rework its operating profit numbers if the ATF price continue to increase. The airline had earlier projected an operating profit of Rs 16.5 crore for 2004-05 against Rs 15.5 crore last year.