Rise in airfares likely after jet fuel prices go up by 2 pc

PTI, 17-01-2011 15:11:38

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After a two per cent hike in jet fuel prices, airline officials today indicated a rise in airfares with Civil Aviation Minister Praful Patel saying the Ministry intervenes in such matters only if the increase is unjustified. 

Officials of Jet Airways and Kingfisher Airlines gave indications that the rise in costs would have to be partially borne by the air travellers though they did not directly say that the fares would rise soon.

"Airfares are governed by the airlines only and the government does not intervene. Government intervenes only when the hike is unjustified, as the DGCA did in December last. The Competition Commission had also intervened then after the spot fares rose suddenly (during lean season of November)," Patel said in reply to questions.

However, he maintained that when cost of aviation turbine fuel (ATF) rises, "it is natural that it will have an impact on the fares."

Asked when was an airfare hike likely following the seventh increase in ATF rates since October, Jet Airways chief Naresh Goyal said, "If costs rise, how can it not get reflected (in fares). If you run a business, you can’t sell an item costing Rs ten at Rs eight unless you decide to go bankrupt."

Both Goyal and a Kingfisher official, requesting anonymity, did not directly say when the prices would rise or by how much. Top IndiGo officials too did not respond to similar queries.

ATF rates in Delhi were hiked last week by 1.98 per cent to Rs 48,764 per kl. The latest hike came on the back of a Rs 935 per kl hike from January 1 and a massive 3.6 per cent increase on December 15.

Fuel cost accounts for almost 40 per cent of an airline’s total costs. 

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