Airlines in fare hike push

New Delhi: Airlines are preparing to raise fares at a time of falling jet fuel prices.
The price of aviation turbine fuel is expected to fall considerably as the crude oil price for Indian state-owned oil marketing companies has come down to about $97.12 a barrel from $113.65 last month.
Adjustments in the jet fuel price is usually made in the beginning of a month. The marketing companies had slashed the prices by 16 per cent in September after the crude price plunged from a peak of $147 per barrel.
However, airlines have decided to hike fares to cash in on the higher demand for air travel during the festive season.
Besides, a hike would help them recover some of their earlier losses.Jet Airways has announced a 10 per cent hike in fares. Kingfisher Airlines has also decided to revise its basic fares from October 1.
There are indications of Air India raising ticket prices as well, but the national carrier will wait for the oil companies’ decision on jet fuel.
Analysts say airlines have not passed on the earlier hikes in jet fuel prices completely to the consumers and are, therefore, unlikely to reduce the fares now.
The high rate of sales tax on jet fuel, which varies from 4 per cent to 29 per cent, is a major reason for the high price of the fuel. Andhra Pradesh has the lowest sales tax of 4 per cent, while Tamil Nadu and Bihar charge 29 per cent. Madhya Pradesh is marginally lower at 28.75 per cent. Bengal charges 25 per cent and Delhi, 20 per cent.
28/09/08 R Suryamurthy/The Telegraph

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Categories: Indian Aviation- In General Sep 2008