Jet fuel becomes cheaper, fares don't

New Delhi: Fuel surcharge being charged by domestic airlines seems to be defying the law of gravity. While airlines have in past few months hiked the surcharge, every time when aviation turbine fuel (ATF) prices rose, similar reduction of cess didn't happen with jet fuel price now going down.
According to prices for February announced by oil PSUs, ATF is getting cheaper in all cities — for the second time this year. But airlines are refusing to pass on this benefit to passengers. So surcharge remains unchanged at Rs 1,650 per ticket.
Airlines cite mounting losses, caused by a mix of factors like high ATF prices and overcapacity in domestic sky, for not being able to cut fuel surcharge.
Asked why airlines are quick to just hike surcharge when ATF becomes dearer and not lower cess when it becomes cheaper, Kingfisher EVP Hitesh Patel said: "There is no reason to lower the surcharge. Prices may fall for a while but they are on the higher side overall. If oil breaches the $100-mark, then surcharge will need another adjustment. We have been seeking help from the government on taxes but not getting it."
04/02/08 Saurabh Sinh/Times of India

To Read the News in full at Source, Click the Headline

Categories: Indian Aviation- In General Feb 2008