|
| | RSS Feeds | | | Subscribe for Newsletter | | |
|
|
Air India decides to reduce fuel surcharge by Rs 400 |
|
|
Air India, the leading Airlines of the country, has decided to cut fuel surcharge by Rs 400 on all its domestic flights from Tuesday.
This move by this leading air carrier may compel private full service carriers to pass on benefits to customers of a hugely cheaper jet fuel by dropping fares.
AI-domestic (earlier Indian Airlines) does not levy the congestion charge of Rs 150, its taxes and surcharge component per ticket are now lower by Rs 550 compared to other full service Indian carriers Jet and Kingfisher.
The fuel surcharge for short flights (like Delhi-Lucknow or Goa-Mumbai) will now be Rs 1,950, down from Rs 2,350. Other domestic flights (like Delhi-Mumbai) will now have a fuel surcharge of Rs 2,700 instead of the earlier Rs 3,100. The logic to do so is to boost the sluggish air travel this winter, a peak travel season.
AI CMD Raghu Menon said, "We have decided to bring down the fuel surcharge, now that crude prices have fallen globally, thereby bringing down ATF prices. Although crude prices are still volatile, we hope it will stabilize at the current levels... While airlines are going through difficult times, it is necessary for us to react positively to pass on some concession to passengers and generate demand."
Jet and Kingfisher said on Monday that they have no plan to alter fares as of now. Kingfisher chief Vijay Mallya had last Monday stated that he would reduce fares when aviation turbine fuel is notified a declared good so that it attracts a uniform 4% sales tax across the country. Low cost carriers (LCC) like IndiGo and SpiceJet are mulling a cut but are yet to make a formal announcement.
ATF prices have now fallen by almost half from the all time high in August. In Delhi, for instance, price is down by 48% from Rs 71,028 to Rs 36,900 per kilolitre now. However, full service carriers were till now citing huge losses to reduce fares that they kept hiking in past few months when ATF prices were touching heights.
A senior Aviation ministry official said, "Airlines can`t say they`ll reduce fares only if ATF becomes a declared good. With AI taking the lead, other full service carriers will also be forced to lower fares."
It remains to be seen if the coming Parliament session would be able to amend the Central Sales Tax Act to notify ATF as declared good as the government`s priorities have changed following the Mumbai attack.
According to an official here, domestic carriers presently charge fuel surcharge of Rs 2,350 per passenger flying up to 750 km and Rs 3,100 for those flying beyond 750 km in India. The airline had in June increased the surcharge by Rs 300 for sectors less than 750 km and Rs 550 for longer flights.
The reduction in the fuel surcharge comes after a recent decline in jet fuel prices. State-run oil companies cut jet fuel prices November 15 by over 12 per cent to a 14-month low.
Aviation turbine fuel (ATF) prices were slashed by over Rs 5,580 per kilolitre to Rs 38,163.23 per kilolitre in Delhi from that prevalent in September 2007.
National Aviation Corp of India Ltd, which controls Air India, had in 2005 placed an order for 111 aircraft, 68 from Boeing and 43 from Airbus worth Rs 60,000 crore then. The airline has so far raised more than Rs 12, 000 crore to add 38 new generation aircraft to up its fleet to 147.
|
|
|
|
|
|
| Air India decides to reduce fuel surcharge by Rs 400 |
|
