- International airfares may rise 5% to 20% if crude oil prices stay above $100 per barrel
- EY forecasts international fares could increase 8-15% if crude stays between $100-$110 per barrel
- Grant Thornton expects 5-10% rise on competitive routes and 10-20% on long-haul international flights
International travel during the festive season could become significantly more expensive, with analysts expecting airfares to rise by 5% to 20% if crude oil prices remain above $100 a barrel.
According to estimates shared exclusively with NDTV Profit by EY, Grant Thornton Bharat and a senior aviation analyst, the biggest pressure is likely to be felt on long-haul international routes. Highly competitive sectors may also see relatively smaller increases, as per estimates.
EY forecasts that if crude oil prices remain in the $100-$110 per barrel range, international fares could rise by around 8-15%. If Brent crude moves toward $110-$120, the increase could then widen to 12-20%, adding to existing travel costs as demand picks up during the holiday season.
Grant Thornton Bharat, on the other hand, expects a more differentiated impact across routes. They estimate that fares on highly competitive international sectors could rise by around 5-10%, while long-haul routes could see an increase of 10-20%.
Routes connecting India with the Gulf as well as India and Europecould also see a noticeable impact, while long-haul flights to North America may also face some sharp increases, as per analysts.
Kashish Shaw, a senior aviation analyst, also echoed the sentiment, telling NDTV Profit that airlines could raise fuel surcharges if Brent crude remains above $100, essentially passing on a percentage of the higher fuel bill onto customers.
This pressure comes as brent crude continues to trade above $100 a barrel on the back of continued geopotical tensions in the Middle East. Brent crude slipped below $104 a barrel on Friday, despite extending its decline for a third straight day.
Brent had already fallen more than 3% over the previous two sessions, while West Texas Intermediate crude traded near $101 a barrel. The latest decline comes as traders assess whether disrupted Middle East supplies can gradually return to the market and whether diplomatic efforts could prevent a further escalation of the conflict.
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