Domestic airfares are set to go up further as oil companies have increased Air Turbine Fuel (ATF) prices by 3.5 per cent with immediate effect. The price increase is in line with hike in international crude prices.
Airlines said they don’t have any other option to pass on the additional financial burden on passengers. Though they are yet to decide on the exact amount of the increase in fuel surcharge, it will be within Rs 200 per ticket, said airline executives.
"We will take a decision in a day or two. Fuel surcharge is bound to go up. It may in the range of Rs 100 to Rs 200," said Go Air Managing Director Jeh Wadia.
"This is a very competitive market. We have to watch what our competitors are doing and then take an appropriate decision," said SpiceJet director Ajay Singh. "The increase in fuel prices would put additional burden on us," he added.
Now airlines are charging Rs 750 as fuel surcharge and this is expected to go up. In addition to this, all carriers except Air Deccan and Indian Airlines are levying congestion surcharge of Rs 150. Apart from this, airport tax of Rs 225 is charged on passengers in addition to the fare.
On Monday oil marketing companies announced an increase in ATF prices by nearly Rs 1,400 per kiloliter of ATF for domestic carriers and by $65 per kiloliter for International carriers.
Though the ATF prices differ depending on locations, in Mumbai a domestic carrier would now pay Rs 38,690 for a kiloliter inclusive of sales tax, while it is $ 701.36 for international carriers.