Kingfisher refuses to cut fares

New Delhi: Turning a deaf ear to aviation minister Praful Patel's plea to cut airfares as jet fuel prices have crashed by almost half in past three months, Vijay Mallya-owned Kingfisher on Monday ruled out any such move for now. The airline reiterated its old condition that fares would be dropped as and when the government notifies aviation turbine fuel (ATF) as a declared good so that it attracts a uniform 4% sales tax across the country.
A Kingfisher spokesperson said: "The sharp and continuous spike in ATF prices earlier in the year has left a lasting impact on the bottomlines of airline companies, leading to an accumulation of huge outstandings and liabilities with oil companies and the like. As such, keeping in mind the cash flow needs to settle these accumulated liabilities, there is currently no case for reduction in fares." He, however, added that "once the government brings ATF under the declared goods category, Kingfisher will immediately and significantly reduce fares".
The aviation ministry has managed to get substantial relief to airlines, on the promise that they would pass them on to the passengers. ATF prices have fallen by more than half from August highs after seven successive falls in past three months. But airlines, that kept hiking fares on each fuel price hike, have not dropped fares in accordance with the fall in ATF price. Airlines have only reduced fuel surcharge by Rs 400 and that move too was forced by Air India taking the lead in doing so.
The aviation ministry is likely to take a similar step this time too and try forcing airlines to cut fares.
23/12/08 Times of India

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Categories: Kingfisher Dec 2008