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Airfares Up, Up And Away
Posted by Pradeep Sadanapalli | June 20, 2008 | 274 views
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Loading ...It was expected for quite some time and finally it happened. As the aviation industry is in deep trouble, largest private airline Jet Airways, state-owned Air India and the low-cost airline Spice-Jet have hiked airfares following the recent hike in aviation turbine fuel (ATF) or jet fuel.
A Jet executive confirmed that Jet Airways has increased the base fares for journey of up to 750 km by Rs 1,000, while travel of more than 750 km, but less than 1,000 km, will cost Rs 2,250 more. Flying beyond 1,000 km will be dearer by Rs 3,000. Jet’s Mumbai-Chennai route, which was earlier Rs 1,350 (base fare), will now be Rs 3,000, while the base fare of the Bangalore-Hyderabad route, which was earlier Rs 600, will rise to Rs 1,000.
The new charges are being added to the base fare and they do not include taxes and fuel and congestion surcharges as levied by various airlines.
New Delhi-based SpiceJet has increased the fuel surcharge on its routes. The fuel surcharge for travel distance up to 750 km (short-haul) has gone up by Rs 300, while for travel beyond 750 km, it would be Rs 550. Apart from fuel surcharge, Air India and SpiceJet have hiked their airfares too.
Fuel surcharge hiked 5 times in past five months
AirIndia has raised its fares by Rs 1,000 for routes up to 750 km and by Rs 2,250 for a distance between 750 km to 1,000 km. These hikes in fares are effective from June 20. Travel agency sources said that Kingfisher too has hiked fares, but it was not confirmed independently.
Industry sources said InterGlobe-promoted Indigo, is likely to take a decision on fare hike next week. Aviation industry in the country has suffered a loss of Rs 4,000 crore in 2007-08. The projected loss during the present fiscal is expected to be double than that in 2007-08.
Analysts said with global oil prices spiralling, the airlines have hiked fuel surcharge five times in the past five months. ATF prices have risen from Rs 20 per litre in 2004 to Rs 70 per litre currently, while the average fare declined from Rs 6,000 in 2004 to Rs 3,900 during 2007.
Other airlines have already increased their fuel surcharges in the last few weeks, including private airlines Jet Airways, Kingfisher Airlines and Simplify Deccan, hiked their fuel surcharge by Rs 300-550.
SpiceJet announced last week that it would be reducing its flights from 117 per day to 100 per day to combat soaring jet fuel prices. Naresh Goyal, chairman of Jet Airways, recently accepted that industry losses could reach about Rs 9,000 crore in the 2008-09. He said, “Oil is killing everybody, not just airlines, but the whole economy and consolidation and route rationalisation will start happening in next few months.”
SOURCES:
Economic Times
Topics: Public Concerns, Travel |
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