Domestic airfares set to go up by Rs100

Domestic airfares set to go up by Rs100

New Delhi/Mumbai: Most of India’s passenger airlines will hike fares across the country this week by Rs100 a ticket after jet fuel prices were increased by oil marketing companies by about 4.2% on Monday.

The hike could impact ticket sales as the peak winter travel season kicks off this month. Passengers will now have to shell out about Rs1,575 on each ticket as taxes and other charges that airlines levy to combat fuel prices and longer flying time over crowded airports.

The so-called fuel surcharge will now go up to Rs1,200 irrespective of the destination they travel inside India. Another Rs150 is charged as congestion surcharge to offset the cost of extra fuel burnt while circling airports waiting to land, and Rs225 is charged as airport fee by the government.

Wolfgang Prock-Schauer, chief executive of Jet Airways (India) Ltd, said his airline would be imposing a Rs100 additional fuel surcharge from Tuesday, while Paramount Airways Pvt. Ltd, Kingfisher Airlines Ltd and SpiceJet Ltd said they will follow soon. A spokesperson for Air India said no decision on a hike has been taken yet.

Low-fare airlines IndiGo and Deccan Aviation Ltd-run Air Deccan said they are still in the process of reviewing surcharges. “The capacity (number of seats) in the market is still quite high and the loads are not as good as they were last year. But if the prices are logistically worked out, airlines can actually have a profitable quarter (ending January)," said a spokesman for Delhi-based SpiceJet.

The era of cheap tickets in India is virtually over with consolidation in the sector, an expert said. “There are few mega players left—Kingfisher Airlines, Jet Airways and Air India. Once they decide fares, others follow," said Gurcharan Bhatura, secretary general of aviation thinktank Foundation for Aviation & Sustainable Tourism.

Easing up on cheap tickets has already seen the load factor, or the number of passengers to seats on an airplane, of airlines such as Air Deccan dropping substantially from 87.3% in January this year to 65.7% in August—showing how sensitive air travellers are to fares, said an analyst. That’s despite a jump of 37.75% in the number of passengers carried this year until now, compared with the same time last year.

The representative of a passenger association said that oil firms have reduced jet fuel prices for two consecutive months (August and September) but that the airlines had not passed on that benefit to the consumer.

“The imposition of fuel surcharge is not justifiable as airlines never lowered it when the oil companies reduced ATF (aviation turbine fuel) prices," said D. Sudharkara Reddy, national president of Air Passengers Association of India.