Will airlines pass on gains from lower fuel prices?

New Delhi: Domestic flights could cost less in the New Year. With aviation turbine fuel costing 4 per cent less in January vis-a-vis the previous month, domestic airlines indicated on Monday that they could look at reducing the fuel surcharge on some routes.
“The surcharge is likely to come down. It would be difficult to quantify the decline since on long haul flights most airlines recover their costs while this is not the case on flights which are of less than 90 minutes duration,” the Executive Chairman of low cost airline SpiceJet, Mr. Siddhanta Sharma, said. At the moment, most airlines impose a surcharge of Rs 2,025 to offset the increasing ATF prices.
A spokesperson for Air Deccan said a decision on whether the surcharge should be lowered was likely to be taken by Wednesday (January 2).
The Managing Director, Paramount Airways, Mr M. Thiagarajan, however said that the airline had no immediate plans of lowering the surcharge as ATF prices were “fluctuating a lot.”
The decision by some airlines to re-visit the surcharge follows Indian Oil lowering ATF prices.
31/12/07 Business Line

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Categories: Indian Aviation- In General Jan 2008