Rise in airfares likely after jet fuel prices go up by 2%

New Delhi: Air fares are likely to go up further. Two of India’s largest private airlines, Jet Airways and Kingfisher, on Monday indicated that a hike in ticket prices was imminent because of costlier aviation turbine fuel (ATF).
Jet’s Naresh Goyal and officials of Kingfisher said with a 2% increase in ATF prices over the weekend, some of the burden will have to be borne by the consumer. Since October 2010, oil companies have increased ATF prices seven times.
ATF accounts for about 40% of an airline’s cost and frequent increases in fuel prices usually lead to an increase in ticket costs too. Civil aviation minister Praful Patel on Monday expressed his inability to intervene in the matter.
“Air fares are governed by airlines. The government intervenes only when the hike is unjustified, as the DGCA did in December 2010.
The Competition Commission had also intervened then after the spot fares rose suddenly (during lean season of November),” Patel said.
17/01/11 Sindhu Bhattacharya/Daily News & Analysis

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Categories: Indian Aviation- In General Jan 2011