New Delhi: To make its fare structure more transparent, Air India is launching a dynamic fuel surcharge system, where the amount a consumer pays for travel would change (even decrease) in tandem with the regular alterations in the price of the aviation turbine fuel (ATF). The new charge may be called “fuel pass through”, according to a source in the airline.
According to the formula being worked out, the company would raise the fuel charge by Rs 50 for every Rs 1,000-per-kilolitre increase in the rates of jet fuel. Inversely, there would be a slide in the fares by the same amount in case of a Rs 1,000-per-kl decrease.
“We are working on this,” said a senior Air India official. “It will be implemented in a month.”
He said this would make the system “much more transparent” than the existing fuel surcharge, which is not directly proportional to the price of ATF. “We plan to call it ‘fuel pass through’,” he revealed. It will both increase and decrease in accordance with the change in ATF price.”
The carrier, he said, was not currently discussing the idea with any other airline. “Usually, the industry follows whatever we do. We hope that happens in this case as well,” he added.
04/04/12 Mihir Mishra/Business Standard
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