Airlines to implement fuel surcharge of Rs 650 from today

Our Bureau

The Re 1 and Rs 500 tickets being offered by Air Deccan will be less than the surcharges that would be levied on these tickets.

New Delhi, Aug. 7

From Tuesday, the implementation of the increased fuel surcharge along with the passenger security fee (PSF) could make the additional amount you pay for travel almost equal the cost of your air ticket.

Take the case of the low-cost airline SpiceJet, which is offering tickets at Rs 999. Add to the fare the increased fuel surcharge of Rs 650 and the PSF of Rs 225 and the total surcharge payable on the ticket would be Rs 875.

Similarly from tomorrow, Re 1 and Rs 500 tickets being offered by the low-cost airline Air Deccan would be less than the surcharges that would be levied on these tickets. Even on the Kochi-Kozhikode sector on which Indian's starting fare is Rs 1,610, the surcharge would add another Rs 150 or 9 per cent to the cost of travel.

Surcharge hike

The domestic airline industry has announced that it will hike fuel surcharge to Rs 650 from August 8. Incidentally, this is the second fuel hike in as many months. In July this year, domestic airlines hiked fuel surcharge to Rs 500.

The domestic airline industry maintains that it has been forced to raise surcharge during the past two successive months as global prices of aviation turbine fuel have been rising continuously. This month the average ATF price touched Rs 44,700 per kilolitre up from an average price of Rs 34,100 per kl in August last year. "Every Rs 100 increase in the fares sheds some percentage of new air travellers. At the moment the impact is not really being felt as the market is recording double-digit growth and there has been an increase in the number of players," said an industry analyst.

During the first three months of the year, the domestic airline industry carried 72.46 lakh passengers up from 49.90 lakh carried during the same period in the previous year.

"The Government should help the industry. While diesel and petrol prices remain largely stagnant for long periods despite global prices moving northwards, the price of ATF is changed at the end of every month. This is not good for the sector," added an airline official.

(This article was published in the Business Line print edition dated August 8, 2006)
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