Kingfisher says no fare cut for now
Vijay Mallya’s Kingfisher Airlines said it would not cut fare despite a 55 per cent reduction in jet fuel or aviation turbine fuel prices.india Updated: Dec 22, 2008 20:40 IST
Vijay Mallya’s Kingfisher Airlines said it would not cut fare despite a 55 per cent reduction in jet fuel or aviation turbine fuel (ATF) prices in the last three months and the civil aviation ministry asking airlines to pass on the benefit to passengers.
At a meeting held recently, Kingfisher executives evaluated all options and took a decision to hold the fares to minimise losses incurred in previous quarters. The passenger load factor is also expected to come down in January and fare reduction may not help, executives said.
“The sharp and continuous spike in ATF prices earlier in the year has left a lasting impact on the bottomlines of airline companies,” a Kingfisher Airlines spokesperson said. “This led to huge outstanding and liabilities with oil companies and the like. Since the cash flow needs to settle these accumulated liabilities, there is currently no case for a reduction in fares.”
“However, once the government brigs ATF under the declared goods category, Kingfisher Airlines will immediately and significantly cut fares.”
Air India is planning to lower fares further with the hope of getting a Rs 2,500-crore bailout package from the government to clear pending dues and buy new planes as committed.