Airlines fear another ATF rise

NEW DELHI: With oil prices nearing $100, domestic airlines are expecting yet another hike in aviation turbine fuel (ATF) price on December 1 that would once again be passed on to passengers.

Airlines anticipate a 8-10% hike in ATF by oil companies, which in turn will lead to higher fuel surcharge. They also fear that coupled with steep peak season fares, the total fare hike now threaten to either make the tag of low-cost redundant or slow down the rate at which bus/train travellers were taking to skies or even reverse that trend.

For instance, a three-tier AC Rajdhani ticket to Kolkata costs around Rs 1,600. Last December, a Delhi-Kolkata air ticket used to cost about Rs 2,300 and the difference in fare weighed in airline’s favour due to less travel time. ‘‘Now this December Rajdhani fares are unchanged and air ticket costs about Rs 1,000 more. The difference in air and train travel for a family of four or five planning to travel on vacation, will be considerable,’’ said a travel agent.

‘‘Another ATF hike seems to be on the horizon. While a solution to this monthly hikes is needed, none has been offered so far. Repeated hikes will reach a stage when they start affecting the number of fliers,’’ said Jet Airways CEO Wolfgang Prock-Schauer. Airlines say they have no option but to pass the additional burden to fliers.

Air Deccan founder G R Gopinath said: ‘‘Whether there’s another hike or not, ATF prices in India are 60 % higher than global rates due to a number of higher sales tax, customs and excise. There’s urgent need for tax reforms and true competition in supplying ATF,’’ he said.

Source: timesofindia.indiatimes.com