Airlines plan 20-25% fare hike

New Delhi: Your hopes of flying becoming cheaper anytime soon have just been dashed. Indian carriers have told the aviation ministry that they need to hike fares by 20 to 25% (Rs 2,000 on an average) to cover their operational costs, considering the current high price of aviation turbine fuel (ATF) or jet fuel.
The airlines further said that even if states lower sales tax on jet fuel, they will not be able to pass on the benefit to passengers by lowering surcharge. Even incrase in fare could be higher than 20-25% and surcharge may exceed the current highest slab of Rs 2,900, if ATF prices go up again next month, with crude hitting $140 again.
Aviation secretary Ashok Chawla had asked airlines during a meeting earlier this month to do some calculations and inform the ministry if they could pass on the benefit of lower sales tax to passengers. Any such assurance would have made the ministry's task of getting states to lower tax on ATF easier. But airlines — who are feared to post a collective loss of Rs 8,000 crore in fiscal 2008-09 with national carrier Air India leading the pack — said they are not in a position to do so.
On Monday, the GMR-backed Hyderabad International Airport (P) Ltd (HIAL) sent its proposal for charging user development fees (UDF) from domestic passengers to the ministry. The infrastructure major has proposed a levy of Rs 600 for all outbound passengers flying to anywhere out of Andhra Pradesh. For those flying within the state, a fee of Rs 350 has been proposed.
Bangalore airport is also going to levy a UDF on domestic passengers when it completes there months of operation.
18/06/08 Saurabh Sinha/Times of India

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Categories: Indian Aviation- In General Jun 2008