BUSINESS

Airlines not to roll back of fuel surcharge

Source:PTI
June 05, 2008 18:05 IST
Air passengers are unlikely to get the benefit of the 4.3 per cent reduction in Aviation Turbine Fuel (ATF) announced by state-run oil firms on Thursday, as several major airlines said the move would not mitigate their losses in any manner.

"There is no question of a roll-back on fuel surcharge," budget airline SpiceJet's chief operating officer, Samyukth Sridharan, told PTI.

Fuel prices have shot up by nearly 50 per cent in the last three months and a marginal reduction of 3-4 percent will not make any difference, Sridharan said.

The SpiceJet official said that even when the oil companies had revised their ATF prices the last time, SpiceJet had not increased its fares.

Vijay Mallya-spearheaded Kingfisher Airlines said that it was studying the impact and would shortly arrive at a decision.

"We are studying the impact of the just announced reduction in ATF prices and will reach a conclusion shortly," its spokesperson said.

Other private airline, Jet Airways, too maintained a similar stand saying it was too early to take a view on the matter.

"We are studying the issue," a Jet Airways' spokesperson said. Following a five per cent cut in customs duty on ATF by the Government public sector oil companies had announced a reduction of Rs 3,239 per kilolitre in ATF prices.

However, airline officials in private admit that there would not be any reduction in the fuel surcharge at all.

"The hike that we effect in fuel surcharge following a hike in ATF price is just marginal and does not offset our losses," a private carrier's official said.

"The fuel cost of our airline now constitutes almost 50 per cent of our total operating cost, so the question of reducing the fuel surcharge does not arise," he said.

Major oil companies had recently announced an 18.5 per cent hike in ATF prices, following which major air-carriers including state-run Air India had upped their air-fares by raising fuel surcharge by Rs 300-550 across sectors.

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Source: PTI
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