Airlines increase fares in the face of rising cost of fuel costs

The rising cost of fuel has started to pinch many airlines that are now looking to pass the cost on to passengers with a hike in aviation turbine fuel surcharge component of air fare.

Low-cost carrier, SpiceJet has raised fares a couple of hundred rupees and is now reviewing it on a daily basis. Kingfisher too has effected the required hike in the fuel surcharge.

According to Jet Airways, the hike in oil prices had led it to constantly 're-adjust' its fares. Aviation fuel prices, reviewed fortnightly, have been rising since September 2010.

The fuel prices which ruled at Rs40,138 per kilolitre in September 2010, have risen over Rs50,000 per kilolitre to reach almost Rs58,000 per kilolitre in the latest review today.

Terming the high crude prices ''unsustainable'' for survival of airlines, SpiceJet CEO Neil Raymond Mills said, the airline had already started passing it (burden of high crude prices) on to the customer. He added Spicejet had started with an increase of a couple of Rs100 per ticket, but this could be just the beginning.

Mills said some of the cost would have to be passed on to the consumer and some of it would have to be borne by the airline.