Patel: Seeking solution

New Delhi, June 2: Aviation minister Praful Patel will meet Prime Minister Manmohan Singh soon to discuss a bailout package for carriers hit by costlier aviation turbine fuel.

“We are extremely unhappy over the aviation turbine fuel price rise and are taking a serious note of it,” Patel told reporters here.

Air travel is now no more a luxury but a necessity, and the hike would have a cascading impact, the minister said.

State-owned oil marketing companies have raised fuel prices for domestic carriers by around 20 per cent and for international carriers by close to 12 per cent.

The situation is grave enough for the airlines to express their helplessness in dealing with the situation.

“Some airlines have informally told me that they are contemplating to either prune or rationalise their services. These are very serious issues the airline industry is facing. It shows that things are not well with the industry,” Patel said.

For now, private airlines plan to increase the fuel surcharge, which is expected to push up fares by 8 to 10 per cent. They have passed on 40 per cent of the fuel cost to the consumers.

The country’s largest private sector carrier Jet Airways today announced an increase in the fuel surcharge by Rs 300 to Rs 550.

The surcharge for short-haul travel (up to 750 kilometre) will go up by Rs 300, while for long-haul (beyond 750 kilometre) travel, it will be Rs 550.

Low cost airline SpiceJet and Kingfisher have said that they will announce their fare hike shortly. Jet, Kingfisher and SpiceJet had hiked their basic fares by 10 per cent in May, while the surcharge was hiked by Rs 150-350.

Loss forecast

The International Air Transport Association (IATA), the global body representing 95 per cent of the world airlines, today said that if crude oil stayed at $135 per barrel for the rest of the year, the global airline industry would incur losses of $6.1 billion.

“The skyrocketing price of oil has eaten into the gains (from fuel efficiency measures) and left the industry in the red again,” said IATA director-general Giovanni Bisignani.

He made a strong plea to governments to reduce taxation and free the airline industry from all regulations, such as bilateral agreements for air traffic rights, to enable airlines attract foreign capital.

A resolution passed at the conference said, “In view of the existing fees and charges, governments must refrain from imposing multiple and additional punitive taxes and other measures that will only deepen the crisis.”

The resolution demanded speedy steps to modernise air transport infrastructure and eliminate wasteful fuel consumption.