With oil companies announcing a 12 to 14 per cent hike in the prices of Aviation Turbine Fuel, airlines are set to increase the ticket fares by Rs 1,650 to 2,000 to offset the hike.

ATF has been the single most troubling issue for airlines as it constitutes 40 per cent of their operational cost. On Tuesday, oil companies further pushed up the price of Aviation Turbine Fuel by 12 to 14 per cent in various cities. The ATF price in Delhi has been raised to Rs 53,309.30 per kilo litre from Rs 47,048 86 per kilo litre while in Mumbai, the price rose by Rs 6,536.35 to Rs 55,191.58 per kilo litre.

While Kingfisher is already planning a fare hike in the range of Rs 150-350, other airlines are also planning to increase fuel surcharge on tickets by this weekend.

Budget airlines may be looking at a differential fuel surcharge on short haul and long haul passengers within the range of Rs 100-400. Passengers have been demanding for differential fuel surcharges for some time now.

The Ministry of Civil Aviation has repeatedly been taking up the issue with the Petroleum Ministry and also with the states to cut down sales tax on ATF — another major component that pushes up fares. While Andhra Pradesh and Kerala recently announced massive cuts in sales tax on ATF, other states are yet to follow suit.