The Telegraph
Since 1st March, 1999
Email This PagePrint This Page
More airlines raise fares

New Delhi, Nov. 6: Indian Airlines and Air Sahara today announced a 10 per cent hike in fares from this weekend following in the footsteps of rival Jet Airways who made a similar announcement last night.

All three domestic airlines have blamed higher air turbine fuel costs and airport charges for their decision. “Things have become so costly that we have to go in for this hike,” said Uttam Kumar Bose, chief executive of Air Sahara.

Turbine fuel costs, which account for about 35 per cent of the cost of running an airline, have gone up by as much as 40 per cent over the last nine months with the steepest hikes occurring in the last one month.

Fears of war in West Asia have resulted in the rise of global petro product prices, including that of aviation turbine fuel. Airline officials said the current fare hike would only cover two-thirds of the cost push, leaving a substantial increase uncovered.

Bose did not rule out further hikes in December if oil prices continue to move upwards. “The economy is no longer immune to global price shocks,” he said.

However, all three airlines have decided to continue with their cheap fare schemes for passengers who book seats 15-21 days in advance. Officials, however, said that though the special excursion fares, termed Apex fares, would continue for some time, they would in all likelihood be “re-thought” later.

Indian Airlines director, commercial, Anil Goel said besides the cost push imperative, this was the right time to go in for a fare hike as the market had picked up after a lean season.

Today’s twin hikes have brought to a halt the price war raging in the Indian skies for the last few months that brought fares tumbling by as much as 60 per cent at times. The fare war had also seen seat utilisation rising for all the three airlines to over 60-70 per cent.

Overall profits, however, had come down. In fact, the biggest of the three, Indian Airlines, will be reporting a loss of Rs 105 crore in the first half of this financial year.

An Indian Airlines spokesperson said tickets issued on or before November 9 will be accepted for travel commencing on or before November 14 at the pre-revised rates. However, tickets issued or reissued on or after November 10 will be priced according to the revised fares.

Passengers wishing to cancel tickets on account of increase in fares will be allowed to do so without paying the refund fee, the spokesperson added.

Email This PagePrint This Page