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The Ministry of Civil Aviation will not intervene if there is a rise in air fares following a two per cent hike in jet fuel prices.
Airline officials on Monday hinted at a possible hike in fares.
Jet Airways' chief Mr Naresh Goyal said, “If costs rise, how can it not get reflected in fares. If you run a business you can't sell an item costing Rs 10 at Rs 8 unless you decide to go bankrupt.”
Aviation Turbine Fuel (ATF) rates in Delhi were hiked last week by 1.98 per cent to Rs 48,764 per kilo litre. The latest hike came on the back of a Rs 935 per kilo litre hike from January 1 and a massive 3.6 per cent increase on December 15. Fuel cost accounts for almost 40 per cent of an airline's total costs.
After air fares had been hiked by airlines during the Diwali period, the Ministry of Civil Aviation had stepped in to keep a lid on the spiralling prices.
Asked whether the Government will make a similar move this time, Mr Praful Patel, Civil Aviation Minister said, “Air fares are governed by airlines and the Government does not intervene. The Government intervenes only when the hike is unjustified as the DGCA did last December. The Competition Commission had also intervened then after the spot fares rose suddenly during the lean season of November.”
He added that it is natural for air fares to be impacted when cost of ATF rises.
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