ya as times writes it:
Jet fuel prices soar, push up air fares
TIMES NEWS NETWORK
New Delhi: Even before the expected hike in the prices of petrol and diesel, the cost of plane tickets has already shot up with India’s bleeding oil companies raising aviation turbine fuel (ATF) prices for June by an unprecedented 19% on Saturday.
The burden is being passed on to the traveller by airlines that are reeling under high fuel costs which make for more than half of their operating expenses. Air India raised the fuel surcharge for its domestic flights by Rs 300 and Rs 550. The erstwhile Indian Airlines flights of below 750 km (less than an hour’s flying time) will see the fuel cess rising to Rs 2,250 from Rs 1,950, while the surcharge on tickets for flights of longer duration will go up from Rs 2,350 to Rs 2,900.
The increase is seen as a precursor to the hike in petrol and diesel prices, expected next week.
Other airlines are likely to announce similar or even higher hikes in a day or two and may introduce a three-tier surcharge slab in a desperate bid to prevent short-haul passengers from going back to trains and buses.The fuel surcharge on international flights is also likely to rise sharply.
The record price of crude has led to constant hikes in ATF prices which will hit especially hard airlines bruised by the slower growth rate. Before Saturday’s hike, ATF accounted for 40-45% of the cost for Indian carriers, while the comparable figure abroad is 15-17%. Now, fuel will account for more than half of the total operating costs of an airline. Govt may let more airlines fly abroad
New Delhi: The 19% hike in ATF price is threatening to make flying an elitist affair again, and the aviation ministry is worried about the financial health of the industry. “The situation is indeed grim and we will continue our dialogue with state governments to reduce sales tax on ATF,’’ aviation secretary Ashok Chawla said.
Judging by the reluctance of state governments, it may be difficult to persuade them to forgo the revenue they will get through increased accruals from sales tax on ATF.
With no likelihood of an early respite from rising crude prices, the aviation ministry may have to implement the emergency plan it has drawn up to save airlines from facing rough weather. It may soon pitch for allowing Indian carriers to go abroad by relaxing the current five-year and 20-aircraft fleet size norm. The issue has been stuck in a group of ministers’ meeting for months.
“Foreign startups with three- to four-plane fleets are flying to India. Our plan is to allow Indian carriers to fly abroad on a case-by-case basis. This way they can better utilize their fleets by flying abroad to nearby destinations with three- to four-hour flights at night. Planes can fill up their tanks there at cheap rates and return in the morning, operate with that cheap fuel for the domestic sector and then go abroad at night again. At this time, this is the only way to ensure that India’s aviation boom does not come crashing down,’’ said an official.
http://epaper.timesofindia.com/Repository/getimage.dll?path=TOIM/2008/06/01/1/Img/Pc0011900.jpg
this means flying beyond 750 km, will cost 2900 + taxes + basic fare!!
note: 2900 is merely the fuel surcharge, +225 - Passenger Service Fee, +150 - Congestion Surcharge
= 3275 + basic fare!!
