While Jet, Kingfisher and Spice Jet have confirmed this move, Go Air and IndiGo say they are still assessing the impact and no decision had yet been taken.
MUMBAI: Airlines will increase their fuel surcharge by Rs 300 to Rs1,650 from Monday. While Jet, Kingfisher and Spice Jet have confirmed this move, Go Air and IndiGo say they are still assessing the impact and no decision had yet been taken.
Air India was not available for comment at the time of going to press. The hike is consequent to Indian Oil and its counterparts, HPCL and BPCL, raising jet fuel prices for the ninth time this year.
It is up by Rs6264.39 a kilolitre in Mumbai from Rs42,796.74 to Rs.49,061.13, according to the Indian Oil Company (IOC) website.
The aviation industry says it is high time the government steps into the picture. CEO, Jet Airways, Wolfgang Prock-Schauer told DNA Money, “Indian aviation is running the risk of becoming uncompetitive with fuel accounting for 40% of our expenditure. Nowhere in the world are prices this high and if this continues, it will affect the aviation sector.”
Executive vice-president and CFO, Kingfisher Airlines, A Raghunathan said, “Without any relief on the ATF front, it will be very difficult for the industry to survive.”
An executive in a leading airline told DNA Money, “If the cost of the raw material goes up, it is but natural that the prices of the end product will be impacted.”
ATF prices are revised every month on the basis of international crude prices. It is also heavily taxed and local prices show a premium of close to nearly 80% compared to international levels.
Analysts say that with the constant surcharge, hikes will soon start hurting load factors by driving away sections of the passengers, especially leisure travelers back to railways. While full service carriers, which primarily cater to business traffic, will not be affected as much, the same cannot be said of low cost carriers.
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