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Oil price crash may save India's grounded airlines

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NEW DELHI : The crash in oil prices may provide a welcome reprieve to India's cash-strapped airlines, which are staring at a potential collapse of the sector amid an air travel ban, industry experts told Mint.

Currently, the entire fleet is grounded amid the nationwide lockdown to contain covid. But even when curbs are eased, carriers will have to offer cheap tickets, where the oil price drop would provide a huge relief.

Fuel alone accounts for 40% of Indian airlines total costs due to the high tax structure in the country. In comparison, fuel constitutes about 20%-25% of costs of prominent American and European airlines, where taxes on aviation fuel is much lower.

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