What are you paying for when you buy an airline ticket?

What are you paying for when you buy an airline ticket?
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First Published: Tue, Mar 31 2009. 12 14 AM IST

Stockxpert
Stockxpert
Updated: Tue, Mar 31 2009. 12 14 AM IST
New Delhi: What are the various cost components that go into your airline ticket? Why is there still a fuel surcharge when oil prices are now lower? To find out answers to these airline ticket FAQs, Mint talks to Richa Goyal, director of Stic Travel Group. Edited excerpts:
Stockxpert
What is the biggest cost component for an Indian airline today?
The biggest cost component for any airline is typically landing and parking charges. These depend on which city you are flying to and how much time an aircraft spends on the ground between flights.
Who levies landing and parking charges?
Airport operators.
What are the various elements that a passenger pays for in a ticket? When I book a ticket, I see three components—full economy fare, PSF and fuel charges. Could you explain these?
Full economy fare is your basic fare for that sector. PSF is what we call the passenger service fare, and the fuel surcharge is the surcharge that most airlines are now levying on top of the basic fare because of the increase in fuel costs.
Click here to listen to the extended interview with Richa Goyal.
A domestic carrier may have fewer tax components. For example, Jet Airways (India) Ltd will have a YQ tax, which refers to the fuel surcharge. And they’ll have an IN tax, which is like a departure tax for Delhi airport, for instance. And they’ll have a PSF as well.
To give you another example, if you look at an international carrier and if you look at a one-way fare, Delhi-New York say, the basic economy fare one way would be Rs16,650. On top of that is your fuel surcharge, your YQ tax, which is Rs8,803... And then they have almost six other tax components on top of these two, which basically refer to different types of departure taxes.
The key learning, I think, with all these tax components, for a traveller, is that when you are buying a ticket which is, say, a refundable ticket, it is important for you to know what component you will get the refund on. Because typically, on the basic fare, you will get the refund, but you will not get a refund on taxes.
How come when I book a ticket today I still see a fuel surcharge on the ticket, despite the fact that oil prices have gone back down?
But that has been for a very short period of time. If you compare the period of time that it has come down to the years when it has been significantly high, then there’s a big difference. If you average it out, it’s still been on the higher side.
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First Published: Tue, Mar 31 2009. 12 14 AM IST