SpiceJet fares remain unchanged in levy rejig

New Delhi: Low cost airline SpiceJet Ltd, which flies one of every 10 passengers in India, has shuffled its airfare structure by reducing fuel surcharge on tickets, the biggest component in ticket prices, by up to Rs700 per ticket, or 26%, but made up that decrease by raising the base fare on a ticket.
The result: Overall ticket prices remain unchanged.
An airline ticket typically has a base fare, a passenger service fee of about Rs225, fuel surcharge and a so-called user development fee. Of these, the passenger fee goes to the government to pay largely for security, the user development fee is collected for the airport operator, while fuel surcharge and base fare are part of airline’s revenue.
SpiceJet, India’s second ranked low cost carrier by passengers, behind rival InterGlobe Aviation Pvt. Ltd-run IndiGo, has reduced the fuel surcharge from Rs2,700 to Rs2,000 for tickets flying distances more than 750km— those such as New Delhi-Mumbai, for instance—while flights under 750km will now invite a fuel surcharge of Rs1,500, 23% less than Rs1,950 charged earlier.
But, base fares have been increased in proportion, said SpiceJet chief commercial officer Samyukth Sridharan, declining to give more details.
It was not immediately clear why the changes had been made, but it may be related to a directive from aviation regulator Directorate General of Civil Aviation last month. It had then asked domestic airlines to make it clear, on its tickets, charges accruing to them instead of grouping fuel surcharge and passenger service fee as taxes which “gives an impression to the travelling public that high airfare are due to government taxes”.
18/03/09 Tarun Shukla/Livemint

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Categories: SpiceJet Mar 2009