83 per cent slash in basic fares on Air India's Kerala, Andhra flights as ATF taxes come down
29 May 2008
New Delhi: Air India officials have indicated that the national carrier may be all set to announce a reduction of up to 83% in basic fares from the cities of Kochi, Kozhikode and Trivandrum, as well as from Hyderabad after the two states of Kerala and Andhra Pradesh reduced sales tax on aviation turbine fuel (ATF) to 4%.
Bucking the trend of rising air fares over the last year, Air India has decided to slash fares at airports where the tax on ATF has been reduced.
Basic fares on the Kochi-Trivandrum route (economy class) will come down by 83% to Rs299 from Rs1,780 and fares on the Kochi-Bangalore route will drop 67% to Rs500 from Rs1,525. Hyderabad-Delhi fares will be down to around Rs4,000 from Rs12,690.
The drop in fares for business class is expected to be much higher.
The new fares will come into operation next month.
Air India officials say the move by Kerala and Andhra Pradesh is an example for other states to emulate, for barring these two states all others are still charging high taxes on ATF. This only serves to make air travel expensive for passengers. Officials said cargo rates will also be slashed in the coming weeks.
Air India will reduce basic fares while the Rs225 airport tax and surcharge (Rs1,950 for short-haul and Rs 2,350 for long-haul ) will be extra.