Airlines hike base fares
19 Jun 2008
New Delhi: Major airlines have announced their intention to increase fares by up to Rs3,000 in their base fares for domestic sectors. Air India and SpiceJet has decided to up their air fares by at least Rs300 per ticket on account of high aviation turbine fuel (ATF) prices.
In a previous meeting with the ministry for civil aviation, Indian carriers had voiced their concerns regarding the need to hike fares by 20 to 25 per cent, which would average around Rs2,000 to cover operational costs, given the present record-high prices of jet fuel. They also expressed their inability to pass on the benefit from states lowering sales tax on jet fuel to passengers, in response to a request by aviation secretary Ashok Chawla who had asked airlines to compute if they could pass on these benefits.
Industry sources say that the new fares for Jet Airways, Air India and Kingfisher would become effective from tomorrow, 20 June. Fare hikes by the low cost carriers are in the range of Rs300 to Rs500, according to sources.
Sources indicate that fares for journeys of up to 750 kilometres will go up by Rs1,000, while those between 750 kilometre but less than 1,000 kilometres will cost Rs2,250 more. Flying beyond 1,000 kilometres would be expensive by Rs3,000. These hikes are to be added to the base fare, and do not include taxes and surcharges as levied by the different airlines.
Airlines have sufferred losses to the tune of Rs4,000 crore during 2007-08, and the losses are projected to double during the current fiscal.
