Jet Airways, Kingfisher Airlines and SpiceJet today announced a hike in fuel surcharge by up to Rs 200 on their domestic flights. It translates into a maximum hike of up to 7.5 per cent on existing average fares.
This hike is to offset the rise in fuel prices, up by 12.5 per cent from June. However, Air India is yet to take any decision on this, said an airline spokesperson.
Kingfisher said the surcharge on flights below 1,000 km had been hiked by Rs 100 and for those above 1,000 km by Rs 200. Jet Airways also said they had increased the fuel surcharge by up to Rs 200 on all domestic flights across Jet Airways, JetLite and Jet Konnect.
Budget carrier SpiceJet said it had nominally increased the fuel charge by up to Rs 200 to partially offset the recent 9 per cent increase in fuel prices.
Jet fuel or Aviation Turbine Fuel (ATF) accounts for around 40 per cent of a domestic airline’s operational cost. ATF attracts a sales tax of 4 to 30 per cent in different states across India, making it more expensive than in other countries. The airlines had suffered huge losses after crude touched a high of over $145, taking ATF prices to as high as Rs 71,028 a kl in August last year.
With passenger numbers improving in the past two to three months, airlines have successfully increased fare rates by around 25 per cent during the same period without seeing any fall in traffic. With the holiday season coming, airlines hope the small increase will not have any adverse impact on their passenger load factor.
Airlines have been demanding that ATF be classified as a capital good, which would attract a tax of only 4 per cent across India.
