Crude spike: Airlines may hike fuel cess again

New Delhi: With crude hitting a new high of over $117, domestic airlines have warned they will have no option but to increase surcharge if jet fuel becomes dearer this month-end. The industry fears a 3-4% hike this time round. Airlines have make it clear that only reduction of tax rates by states, can help avert another hike in surcharge.
Earlier this month, the uniform fuel surcharge of Rs 1,650 per domestic ticket was raised to Rs 1,800 for short flights and Rs 2,000 for medium ones. If taxes levied on fuel don't change, airlines — all of whom are making losses — are likely to hike fuel surcharge on an average by Rs 100 for next month. This could mean a lower hike of about Rs 50 for short flights and Rs 150 for medium ones, said sources.
But with load factors suffering with past hikes making flying increasingly expensive, airlines have dangled a carrot this time round — if Delhi and Mumbai reduce sales tax on aviation turbine fuel (ATF), the impact of further hikes can be ‘cushioned' for passengers. The combined taxes and surcharge alone on each ticket currently range from Rs 2,175 to Rs 2,375 and this is having a clear impact on ticket sales. ‘‘We are witnessing 7 to 8 % lower load factors,'' said an LCC official.
22/04/08 Saurabh Sinha/Economic Times

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Categories: Indian Aviation- In General Apr 2008