Cargo industry demands reduction in airline fuel surcharge

An industry body representing cargo and courier companies has sought civil aviation ministry intervention, as domestic airlines have refused to reduce fuel surcharge on shipments.

Fuel surcharge on parcels is charged on a per kilogram basis and varies from route to route. While international airlines and freighter operators have linked the fuel surcharge to crude prices domestic airlines do not follow the practice.

"Domestic airlines charge Rs 13-16.5 per kilogram as fuel surcharge. When surcharge was introduced in 2008 it was Rs 5 per kilogram and the jet fuel rate was over Rs 58,000 per kilolitre. Now the jet fuel rate has come down to over Rs 52,000 per kilolitre and we are demanding that airlines pass on the benefit by reducing surcharge,'' said Vijay Kumar, chief operating officer of Express Industry Council of India.

Kumar said the body has demanded that domestic airlines also link the fuel surcharge to price of crude oil and sought government intervention on the issue.

"Jet Airways has reduced the surcharge by one rupee (to Rs 15) from February 1, but the reduction is negligible. Lowering of rates will help small and medium exporters and companies,'' he added.

New Year began on a positive note for domestic airlines with oil marketing companies (OMCs) reducing jet fuel prices 12.5 per cent on Thursday, the steepest cut since July. Between October and December last year, jet fuel prices declined 11 per cent.

However the airlines have not passed on the benefit to passengers and have not reduced airfares. Airline executive say that average fares in India are lower compared to other markets and can think of further reduction if the fuel price drop sustains over a longer period.