Another round of air fare hike in offing

New Delhi: Air fares are likely to go up again next week. With crude touching $142, airlines expect oil PSUs to hike aviation turbine fuel (ATF) prices on Monday. Any increased costs will be passed on to passengers in form of higher surcharge, and hence increased fares.
Airlines like SpiceJet and IndiGo are thinking on lines of having more levels of surcharge instead of just two existing ones — below and above 750 km — to stem the exodus of passengers on short and medium haul flights to other modes of transport. With school vacations ending soon and business travel on decline, the industry expects a negative travel growth in July and August. Whether things change in winter will depend largely on the ATF prices then and whether airlines are able to survive this prolonged period of financial crunch.
Airlines' fears stem from the fact that neither have states agreed to demand of reducing sales tax on ATF, nor is the government likely to pass on increased crude cost to petrol, diesel and LPG. Which means, ATF may have to bear the brunt of an disproportionately high increase, said aviation industry insiders.
28/06/08 Times of India

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Categories: Indian Aviation- In General Jun 2008