Financial Freedom

New Delhi: Get ready for another round of airfare hike. With global crude touching new highs, oil PSUs hiked price of aviation turbine fuel by over 4 % from Thursday and most airlines have decided to pass on this cost by increasing fuel surcharge levied on each ticket anywhere between Rs 100 and Rs 150 from the current Rs 1,200.
Only Jet Air CEO Wolfgang Prock-Schauer said the surcharge will be hiked by Rs 150 from next Monday. Even Air India is likely to effect a similar hike. Coupled with higher basic fares in this peak travel season, this effectively means low cost carriers remain so mainly in name.
Indian carriers, which posted a loss of nearly $ 500 million last fiscal, say they can’t absorb rising cost of fuel — that now forms 40 % of their operating expense. The situation is so bad now that most airlines with some exceptions like Jet spent a better part of Thursday evaluating the amount of surcharge hike as they also don’t to lose passengers to other modes on transport like trains at least on short sectors.
‘‘There is this fear but we can’t have small hike on short flights and big one on others. The hike has to be uniform to keep calculation simple.
The ATF price hike this time is a steep 4.2 % and we want to arrive at the right figure that would be between Rs 100 and Rs 150. A delay in announcement by a day or two doesn’t matter as most bookings for November have already been made,’’ said Spice-Jet executive chairman Siddhanta Sharma. Echoing this, other carriers like Kingfisher, Indigo and JetLite also said a hike in the range of Rs 100 and Rs 150 would be announced shortly.