Airline fares climb with fuel price increase

11 September, 2007:

A steady rise in prices of jet fuel during the first few months in 2007 has spurred airline majors to push up fares. Airlines, including Indian Airlines and Jet Airways, have increased fares already. The price of aviation turbine fuel or jet fuel, which constitutes 30 to 35 per cent of the operating cost of airlines, has been rising between 2 and 3 per cent over the past several months, forcing the aviation industry to increase fares.

Reports said that the pre-merger entities of Air India, Indian Airlines have decided to charge up to Rs 400 more on all discounted, unchecked, and apex class tickets. This is not all, the state run airline companies have also said that they will charge a higher slab from September 10, 2007. Though the average hike will be Rs 200, the maximum of Rs 400 is likely to be popular routes like Delhi-Thiruvananthapuram and Delhi-Kochi.

Meanwhile, Jet Airways has also announced a hike of Rs 200 on all routes and all fares. Besides this, an additional Rs 500 will be levied on all Jet Airways coupons that have been purchased by passengers under various schemes, reports added. Air Deccan had also recently announced that the airline would hike fares by Rs 500 to Rs 1,000.

Though other domestic carriers haven't announced any formal hike, they are all reportedly reducing the number of seats available on lower fares. Fare hikes will depend on general industry behavior, therefore, carriers are closely watching each other. Airlines point out that usually, September to December has a high demand for travel, and fares charged in this period are higher than in the monsoon.