LCCs may reduce fares only on short routes, post-ATF price reduction
03 January 2008
New Delhi/Mumbai: Low-cost carriers may reduce airfares by Rs100 to Rs150 on shorter routes as a result of the 4 per cent reduction in the cost of aviation turbine fuel (ATF) announced by the Government. Full-service carriers have already ruled out the possibility of any reductions.
This is the fourth reduction in prices of ATF this year, though there has been an increase in the prices on eight occasions. The largest increase, of 14 per cent, was in December 2007, which led to a Rs300 increase in fuel surcharge for passengers.
According to airline officials, low-cost carriers under-recover costs on longer routes, but margins on shorter routes would allow them to cut the fuel surcharge by up to Rs150.