Airlines look at possibility of fare hike

New Delhi: Exactly a fortnight after airlines hiked fuel surcharge by Rs 400, oil companies on Tuesday yet again raised ATF (aviation turbine or jet fuel) prices by 6% or about Rs 2,300 per kilolitre. Now airlines are evaluating whether they should hike fares again. What could save consumers from more shocks is the fact that the post summer holiday to festive season (July-September quarter) is the leanest travel season. Airlines are, in fact brining out special offers to stimulate demand in this lean season.
While Jet and Kingfisher spokespersons said they are evaluating the impact of the latest hike, Air India ruled out any further hike at this moment. After the mid-June hike, fuel surcharge for domestic flights varies from Rs 1,499 to Rs 3,400. If airlines don't hike fares, say industry sources, one thing is certain — they need to withdraw flights to reduce operating expenses.
Tuesday's hike is the fourth in two months. On June 15, the ATF prices were hiked by about Rs 3,949 per kilolitre. Following the latest hike, ATF prices in Delhi from Wednesday will be Rs 38,558 per kilolitre. In Mumbai, the rate will go up from Rs 37,367 per kl to Rs 39,789 per kl. International crude oil prices have firmed to a seven-month high of $73 per barrel on hopes of demand revival in US.
Since ATF accounts for almost half of airlines' operating cost in India, the aviation industry is worried over how they would survive high costs and low passenger loads.
01/07/09 Times of India

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Categories: Indian Aviation- In General Jul 2009