Jet, Kingfisher bosses rule out price cut

New Delhi: The Big Three of Indian aviation came together and the Hindustan Times Leadership Summit 2008 and faced an inevitable question.

They were asked when the airfares would be cut even as aviation turbine fuel price has been cut. But private airlines don't seem to be in a mood to oblige.

The discussion on the state of domestic aviation industry started on a light note.

"We call him Praful bhai (brother)," Jet Airways Chairman Naresh Goyal said about Union Civil Aviation Minister Praful Patel.

"I am not that kind of bhai so please don't misunderstand," Praful quipped and then added that wanted a cut in airfares.

"Now with fuel prices down and also with the government's own desire to see that we are giving whatever help we can to you must match it with a perception that fares are coming down," Patel said.

But both Naresh Goyal and Kingfisher Airlines Chairman VIjay Mallya were quick to turn it down.

"I don't want to close down my company. Vijay thank you very much. You can live on liquor but I have nowhere to go," Goyal said.

Aviation turbine fuel prices have dropped down significantly and combined with the withdrawal of customs duty the decrease has been over 25 per cent.

But Mallya said oil is only one component and that the strengthening dollar is also draining them.

"A huge component of our costs is lease cost for aeroplanes, maintenance costs are all dollar denominated," revealed Mallya.

So for now expect no fare cuts unless aviation turbine fuel prices tumble further or if the fuel is notified as a declared good that will bring the sales tax down to a uniform four per cent across the country from the present average of 21 per cent.

The only hope therefore is for public carrier Air India to bring down prices which could happen in January.

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