Muscat: Airfares from Oman to the Indian and other Asian sectors will have some impact in the long-term due to rising oil prices amid US-Iran Political tensions.
A lot will depend, however, on the events in the region will unfold in the coming days as softening of the political stand by either side will have a direct impact on oil prices.
A senior official of a major Indian airline operating out of Oman told the Observer that ‘no immediate impact is expected as it is a lean season for outbound travelling from Muscat to the subcontinent. Fares are currently on the lower side with the end of the general holidaying season."
According to industry sources, airlines in South Asia will be forced to increase airfares due to any increase in crude prices and weakening of the local currencies.
It may be noted that aviation fuel accounts for nearly 40 per cent of the operational costs for airlines.
On Monday, one-way direct fares for Mumbai this week started from RO 42, while for Delhi it was 88, Kochi 65, Dhaka RO145, Lahore RO60, and Manila RO195
If not for the current political crisis in the new year, oil prices were expected to dip in 2020 to $63 per barrel. Aviation fuel prices were also expected to drop to $75.60 per barrel from 77 per barrel in 2019.
The total industry fuel bill was expected to be $182 billion or 22.1 per cent of expenses, down from $188 billion or 23.7percent of expenses in 2019.
"Fuel prices will have an impact on our profit margins amidst increasing competition. We are keeping a close eye on the new developments," said an official of an Oman-based airline.
The global passenger numbers are also expected to reach 4.72 billion (up 4 per cent from 4.54 billion in 2019.
Currency factor: The Indian rupee is expected to stay on the weaker side for some time due to the sluggish economic situation and regional politics.
R Madhusoodanan, General Manager, Global Money Exchange, said the Indian rupee will continue to be weak for various factors, which include poor growth figures in India and rising oil prices due to geopolitics.
“Weak Indian rupee will benefit exporters in Indian and also NRIs who can use this opportunity to clear debts or loans back home.”
On Monday, RO 1 fetched 187 Indian rupees, 401 Pakistan rupees, 133 Philippine pesos, 219 Bangladesh taka.
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