State-owned Indian (formerly Indian Airlines) on Wednesday said it has introduced a fuel surcharge of Rs 300 for travel on domestic sectors due to steep hike in aviation turbine fuel prices.
With jet fuel prices hiked by 2.5 per cent, Jet Airways on Friday increased fuel surcharge on its tickets by Rs 200 with effect from tomorrow, raising airfares.
With crude oil price crossing $100 per barrel mark, the airlines have begun to pass some of the cost on to the consumer to meet the increased air turbine fuel expenses, and asked the government to take steps to reduce the cost of aviation fuel.
From April 1 all domestic airlines except Air India have increased fee for cancellations and date change by Rs 200 to Rs 950.
An inquiry has been initiated by Directorate General of Central Excise Intelligence officials against these airlines.
Civil Aviation Minister Praful Patel said Indian airlines had suffered major losses in the past two years over the unprecedented rise in prices of aviation turbine fuel.
Eyeing a larger share of the passenger traffic pie, Malaysia Airlines has reduced the fuel surcharge by 53 per cent from Monday for flights to Kuala Lumpur from India. As a result of the reduction, the return airfare from India to Malaysia starts from Rs 16,528, including taxes, the carrier said in a statement.
Low-cost carriers SpiceJet and Indigo effected a cut last week, while Jet Airways and national carrier Air India followed this week. Industry sources said Kingfisher was evaluating a similar move from April.
The crude oil rally will impact prices of aviation turbine fuel, which forms 30 per cent of the operating cost for an airline. The company incurred a loss of $23.1 million during the October-December quarter of FY08. This was against a net profit of $9 million during the corresponding quarter of 2006-07.
Tickets will be sold only through Air India website from August 27-31 and for travel during August 27-September 30.
Turning down Civil Aviation Minister Praful Patel's plea for a fare cut, full service carrier Kingfisher Airlines on Monday said that at present there was no case for reducing air fare.Other airlines like SpiceJet and IndiGo also said that after the recent round of cuts in fuel surcharge, customers should not expect further benefits in the short term, though there would be some advance purchase packages in January.
Air travel is going to be dearer as major airlines have decided to raise the fares by at least 10 per cent besides increasing the fuel surcharge. The move by Air India, Jet Airways, Spicejet and Kingfisher comes in view of rise in prices of aviation turbine fuel by over nine per cent in line with the increase in international crude oil rates.
Indian Airlines on Tuesday announced a hike of Rs 200 on air fare with immediate effect on all international sectors and domestic routes leading to international destination in view of continuing trend of increase in fuel prices.
This will make buying tickets on airlines' websites cheaper as it will not include the transaction fee.
Air fares are set to go up again, with the government announcing an over 18 per cent average increase in the prices of aviation turbine fuel, effective Saturday midnight.
With declining jet fuel prices, Air India has once again taken the lead in introducing further cuts in its fares on key domestic routes, which may lead to another round of 'fare war' among domestic carriers, including the no-frill ones.
Major domestic airlines on Wednesday said they were considering imposing a fuel surcharge and hiking air fares following the announcement of a Rs 1,600/kl rise in jet fuel prices from midnight on Wednesday.
Adding petrol and diesel to GST was a challenging task due to their significant role as revenue generators for both the central and state governments.
The increase in prices of jet fuel by about nine per cent would put an additional burden of Rs 550 crore (Rs 5.5 billion) on national carrier Indian and the airline has asked the government to consider levying a fuel surcharge on air travel or hiking
Air France on Thursday became the first international carrier to hike its fares from India by three euros, citing steep rise in aviation turbine fuel prices as the reason, which may also force Indian carriers to follow suit.
ATF for domestic carriers has become 11.22 per cent cheaper since October and is expected to see more price cuts in the next three months.
Air India, Jet Airways and Kingfisher Airlines have decided to stop the low-fare advance purchase schemes, saying the airfares would now be decided by the market. Some no-frill carriers will follow suit over the next few days. However, regular fares and the fuel surcharge are not being touched. Industry sources said the decision to withdraw lower-level fares was taken as these did not stimulate demand and also in anticipation of a spurt in demand for summer holiday travel.
The airline has now agreed to pay 3 per cent commission on gross fare (defined as basic fare plus fuel surcharge) of domestic and international tickets sold in India.
A day after withdrawal of low fares by some major airlines, Jet Airways and its low-cost subsidiary JetLite have introduced Rs 300 and Re 1 as basic fares respectively under 30-day advance purchase scheme.
Travel agents in the country have had their way with airlines, at least in the domestic sector. National carrier Air India today agreed to pay a 3 per cent commission to travel agents, nearly two weeks after Jet Airways and Kingfisher agreed to do the same.
IA has cut fares on the UAE to Delhi and Mumbai routes by 20 per cent. The one-way fare has been cut from Dh500 (about Rs 5,500) to Dh 400 (Rs 4,400), while the fuel surcharge remains same. The new fares came into effect from July 14. Indian Airlines Regional Manager Abhay Pathak said the airline had introduced special fares to Delhi and Mumbai last Monday.
Faced with a lean season when occupancies drop 15 to 20 per cent, airlines are trying to lure fliers with cheaper fares. If you time your travel well (midweek, off-peak hours), you can still fly many sectors in the country for Rs 2,525.
While the national carrier Air India has decided against a hike, private carriers like Jet Airways and SpiceJet have concrete plans to increase their fuel surcharge on domestic flights.
CCI's ruling came on a complaint filed by Express Industry Council of India.
Former deputy chief minister Sachin Pilot on Tuesday alleged that the Bharatiya Janata Party government at the Centre had 'failed in every field' and claimed if the Congress wins in upcoming state elections, then the Indian National Developmental Inclusive Alliance (INDIA) will form a coalition government in 2024.
Flagging higher fuel prices in many opposition-ruled states, Prime Minister Narendra Modi on Wednesday called it "injustice" to people living there and urged the governments there to reduce VAT in "national interest" to benefit the common man. Modi raised the issue of many states not adhering to the Centre's call for reducing the Value Added Tax (VAT) on petrol and diesel after his government slashed excise duties on them in November last, and asked them to work in the spirit of cooperative federalism in this time of global crisis. Higher prices in some states were also harmful for neighbouring states, he added.
Jet will, however, continue to pay the sale-linked productivity bonus to them.
Consumers are paying an exorbitant 180 per cent tax on petrol, and 140 per cent on diesel in Delhi and in most other towns in India. Little wonder then that the central government expects a staggering Rs 3.46 trillion by levying excise duties on retail sale of the two fuels this year, and Rs 3.2 trillion the next. States would generally have had reason to cheer, as they command a 41 per cent share in Centre's tax revenues. But as the Centre has raised excise duties in the form of "cess," the revenue proceeds are by nature not shareable with states.
Despite a massive decline in crude oil prices since 2012 -- Modi has been prime minister in six of these eight years -- petrol in Delhi has become 10 per cent costlier and diesel 97 per cent, as of July 2.
Anticipating a weak demand in the traditionally lean January-March period, most domestic airlines on Tuesday reduced fares massively after no-frills carrier SpiceJet announced a steep 50 per cent discount on base fares and fuel surcharges across sectors.
The Centre expects cooperation from the state governments to slash the surcharge and taxation on aviation fuel to control its prices, a senior Civil Aviation Ministry official said in New Delhi on Thursday.
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