Airline companies to hike airfares

Stocks

oi-Monika

By Monika Nihalani

Published: Saturday, September 17, 2011, 12:45 [IST]

After the recent fuel hike on land, it is now the turn to look towards the sky. Airline companies are at the brink of increasing airfares after oil companies raised aviation turbine fuel (ATF) prices.

The move have already initiated by India"s largest airline Jet Airways. The company said on Friday that it has raised the fuel surcharge by Rs 200 for domestic sector.

"With the recent hike in ATF prices, Jet Airways has decided to increase its fuel surcharge by 200 per domestic sector. This will be applicable on all flights of Jet Airways, Jet Airways Konnect and JetLite, for sale and travel effective September 17, 2011," the company said in a statement.

ATF price at Delhi's T3 airport was hiked by Rs 1,429 per kilolitre (kl), or 2.5%, to Rs 57,689 per kl with effect from September 15, and at Mumbai current cost of ATF stands at Rs 58,452 per kl. ATF prices differ as per the airports due to local sales tax or VAT.

Fuel makes up to 40% of an airlines" operating cost. Fuel prices get revised every 1st and 16th of every month, considering international prices every fortnight. ATF rates were reduced more than 1,586 per kl early this month.

Other domestic airlines will also follow the suit after Jet to pass on burden to passengers.

GoodReturns.in