Domestic Economy

Iran: Airfares Skyrocket in Wake of Forex Crisis

Business & Markets Desk
The new state of things will undo the gains made by the aviation industry in the past three years and trigger a drastic decline in air travels, particularly those on international routes
Iran: Airfares Skyrocket in Wake of Forex Crisis
Iran: Airfares Skyrocket in Wake of Forex Crisis
The decline in the purchasing power of Iranian tourists due to the depreciation of the rial and inflation will practically cripple tourism

The Civil Aviation Organization of Iran issued a directive on Thursday, saying that the foreign currency needed by airlines to finance their ongoing operations would be determined at the rates set by the Central Bank of Iran’s Sana system, as the government would no longer supply forex at subsidized rates. 
Sana rates are the average of exchange rates at which foreign currencies are traded at bureaux de change on any given day. 
Fees paid to airports and  maintenance costs that should be paid in foreign currency take a huge chunk out of airlines' expenditure budget. Without subsidized foreign currency, such expenses would weigh down airlines’ bottom line, leaving them with no options but to increase ticket prices. And they did raise the fares, and fast.


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