ibnlive » Business

May 23, 2008 at 05:06pm IST

Long haul flights likely to get costlier by June

Mumbai: Airlines are planning to introduce a new slab for fuel surcharge on tickets to factor in the rising costs.

Long haul flights could get costlier by the first week of June because airlines are thinking of introducing a third slab or three tier policy to levy a higher fuel surcharge for passengers flying a distance of 1000 - 1100 kilometers and beyond or on flights over two hours.

Airlines are likely to introduce a three-tier fuel surcharge policy. Sources say the surcharge could be anywhere between Rs 2500 - 2800.

Low cost carriers such as Spice Jet, Go Air and Indigo confirmed that they have discussed the introduction of a third slab for higher fuel surcharge. Jet Airways and the national aviation company said they would wait till the end of the month to factor in the hike in ATF prices.

Kingfisher airline officials said the matter was being discussed at the industry body level or the federation of Indian airlines.

With crude crossing the $135 a barrel mark, sources say jet fuel prices are likely to see a hike of seven to ten per cent by the end of this month.

In April 2008, airlines had introduced a two level fuel surcharge policy for passengers flying distances up to 750 kilometers and those flying beyond 750 kilometers are charged a differential fuel surcharge. While the current fuel surcharge for short haul flights are at Rs 1950, the surcharge is at Rs 2350 for distances beyond 750 kilometers.

Airlines seem to be caught between a rock and a hard place, while jet fuel prices have spiked by 43 per cent in the last six months, passenger growth is down from 29 per cent in November last year to 10.7 per cent in March 2008.