The Hindu Business Line : Air India hikes fares by 10%; Deccan holds back

A day after Indian oil marketing companies increased aviation turbine fuel (ATF) prices, the country’s national carrier Air India hiked its economy and business class fares in the domestic sector by 10 per cent effective Friday.

Meanwhile, the low-cost carrier Deccan, now owned by the liquor baron Mr Vijay Mallya’s UB Group, rolled back its hike announced on Thursday. A statement from the company said on Friday, “Deccan not to increase Base Fares — puts on hold earlier proposal to hike them by 10 per cent, so that its guests can continue to enjoy value flying.”

Full service private sector carriers Jet Airways and Kingfisher Airlines announced a hike in their fares after ATF prices were up 2.8 per cent on Thursday. Currently, none of the low cost carriers have announced any change in the fares, however SpiceJet said that the carrier will review the same by Monday.

Fuel costs contribute 40-50 per cent to the overall cost of the Indian carriers. The airlines have been passing on this cost to the customers in the form of fuel surcharge leading to skyrocketing air fares and consequent fall in passenger loads in the last two to three months.

The surge that came in the Indian aviation industry with the era of low cost airlines and discount fares has also seen softening. High input costs primarily led by ATF prices have forced the airlines to review their business models resulting in flight reductions and higher fares. Airlines have announced 10 per cent reduction in flights so far.

However, with the signs of oil prices cooling down to $121-126 in the last week or so, airlines feel that ATF price might come down by next month, if oil holds at these levels. Whether this will result in fares or fuel surcharge coming down, is still to be seen.

More Stories on : Airlines | Petroleum

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Air India Express plans to hike fares by 15%

Air India hikes fares by 10%; Deccan holds back

Jet Lite announces special advance fares

Haldia dock users worried over poor navigability of Hooghly

Texmaco joins Japanese consortium to bid for Madhepura project