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Domestic fliers hit as AI, Jet hike fares

In an unprecedented move, Air India and Jet Airways announce a 10 per cent fare hike effective immediately, reports Lalatendu Mishra.
Hindustan Times | By Lalatendu Mishra
UPDATED ON JUN 20, 2008 03:13 AM IST

In an unprecedented move, Air India and Jet Airways on Thursday announced a 10 per cent fare hike effective immediately.

Now a Mumbai-Delhi flight will cost you a minimum Rs 6,000 one way on Jet and Air India; it will be Rs 1,000 cheaper on low cost carriers. Short-distance air travel (such as Mumbai-Goa, Delhi-Jammu) will be no less than Rs 3,700 one way.

Airfares have two main components – the basic fare and taxes. Till now, the airlines would offer competitive rates through low basic fares starting Rs 500 upwards for long-haul flights. On Thursday, the two full service airlines increased this basic fare to a minimum of Rs 3,000. The minimum basic fare for short-haul flights (less than 750 km) has been upped to Rs 1,000.

This is the second fare hike in June. Other airlines are also expected to announce a hike soon. Airline executives say the hike was necessitated by the surge in global oil prices. “The rising fuel cost has made operations unviable,” said Jet Airways CEO Wolfgang Prock-Schauer.

However, jet fuel prices have remained unchanged since early June when airlines increased fuel surcharge after oil companies announced a hike. Low-cost carrier SpiceJet also announced a hike, but only in fuel surcharge – it’s Rs 550
extra for long-haul flights.

According to officials, the rise was done to placate travel agents whose commissions are linked to the basic fare. “We are happy that agents will get more commission,” said Subhash Goyal, chairman of the Delhi-based Stic Travel Group.

(With inputs from Samiran Saha in Delhi)

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