Another hike in ATF surcharge to make airfares dearer

New Delhi: With international price of crude touching an all time high of $92, domestic airlines may be forced to raise fuel surcharge once again - very likely by Rs300. It had only recently been hiked by Rs100 to touch the Rs1,200 mark on October 1.

Jet Airways chairman Naresh Goyal has already dropped clear hints that if ATF prices were to continue to spiral, it was likely that the airline would hike fuel surcharge, as no airline was interested in operating in losses.

According to industry sources, a hike of 3% to 4% is expected on the cost of a kilolitre of ATF, which currently costs an average of Rs39,000. 40-45 % of the operating cost of an Indian carrier is due to the price of the ATF, which is amongst the highest in the world. With the domestic airline industry uniformly in the red, an across the board hike in the fuel surcharge is very much on the cards.

Fuel surcharge has risen four-fold in the past 15 months - from Rs300 in July 2006 to Rs1,200 currently. The current rate represents about 77 % of the total taxes and surcharge of Rs1,575 levied on each passenger ticket.