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India: Shape Of Things To Come


Domestic air travel set to become dearer

May 01, 2008

NEW DELHI: Domestic air travel is all set to become dearer. With the crude oil prices touching $120 a barrel and Aviation Turbine Fuel (ATF) prices shooting up, airlines have announced that the fuel surcharge per ticket will increase by Rs.150 for short-haul flights and by Rs.350 for long-haul flights.

Fare hike by 10 p.c.

India’s largest private airlines, Jet Airways, and no-frills airline SpiceJet have already announced the hike in fuel surcharge. Public sector carrier Air India is also mulling a hike in fuel surcharge. Industry sources have said that air fares are also likely to shoot up by 10 per cent and hinted at a similar increase in fuel surcharge on international sectors as well.

While SpiceJet has increased the fuel surcharge from Thursday, Jet Airways will raise the surcharge from May 3 with a passenger coughing up Rs.1,950 for flights up to 750 km and Rs.2,350 for longer flights.

Threat to viability

“The ATF increases since March this year have inflated fuel bill of all domestic airlines by $700 million on an annualised basis and pose a threat to the viability of the industry,” said Wolfgang Prock-Schauer, Jet Airways’ Chief Executive Officer. He said that a 10 per cent hike in basic fares was also on the cards.

SpiceJet Executive chairman Siddhant Sharma said that the price of ATF had gone up by 25 per cent in the last two months and estimated that the monthly fuel bill of the private domestic low-cost carrier would go up from Rs.85 crore to Rs.93 crore.

hindu.com

Domestic air travel set to become dearer



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