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Airlines May Increase Ticket Prices To Cover GST Costs

Updated on: Jul 13th, 2021

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3 min read

Updates from 13th June, 2017

The GST Council had announced some days back that the prices of economy class air travel will come down. However, it is too soon to start celebrating just yet. The recent news trickling in from the aviation sector is that airlines might increase the cost of tickets in order to offset the operational costs that transiting to a new tax system will add to their overheads.

Under GST, airlines will have to pay additional taxes on importing spares and on aircraft lease rentals. Since the margins are already thin for the sector, the additional taxes may lead to an increase in prices.

As reported in The Economic Times.

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Quick Summary

The prices of economy class air travel may not decrease as expected due to added operational costs from GST. Airlines might increase ticket prices to offset additional taxes on spares and aircraft lease rentals.

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