Forget cheap air travel, fares to go up by 20 pc

TURBULENT TIMES: The industry estimates a collective loss of about $700 million this year.

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New Delhi: The Rajdhani Express would be a better idea if you are planning a budget holiday this season as flying is once again slowly getting out of reach for the common man.

Nearly all airlines will hike fares by 8-10 per cent in the next few days. This follows a 10 percent hike last month. So in two months fares will go up by over 20 per cent.

What this means is that if a person is flying Delhi-to-Mumbai as per the new fares he will have to pay Rs 2,500 as fuel surcharge over and above his ticket price and taxes.

Most airlines say the hike is unavoidable with the aviation turbine fuel (ATF) price up by 20 per cent, which would now amount to Rs 70,000 per kilolitre in Delhi and Rs 72,000 per kilolitre in Mumbai.

In fact oil prices have registered a 150-200 per cent increase in the last three years. Since fuel accounts for 40 per cent of an airlines’ operating cost, they are all in the red.

According to the latest figures, the industry estimates a collective loss of about $700 million this year.

And the effect is beginning to tell – this year the traffic growth has been up by a mere 8 per cent as compared to 29 per cent last year, which is a decline of nearly 21 per cent.

With such turbulent times ahead for the airline industry, experts say that some companies may be forced to shut shop.

The fallout

Jet Airways is considering a surcharge on check-in baggage. Jet Airways Chairman Naresh Goyal recently said that airlines have to look at additional revenue sources in view of mounting losses.

Goyal said some American airlines are already charging a similar levy and added that there was no way for the global airline industry but to raise fares due to the hike in global crude prices.

In fact last week, low-cost carrier Deccan was reported to be considering surcharge on check-in baggage.

Rising fuel prices have already forced airlines to increase the surcharge on fuel several times in the last one year.

(With inputs from Karma Paljor and Shreya Dhoundial)