Muscat, Jan 6 - 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. 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 23.7 per cent 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.
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