Airlines increase fares to offset rising fuel cost and falling rupee

While some foreign airlines have increased fares by 5 to 10 percent, domestice airlines have so far been shy of revising fares, fearing it would hit passenger traffic

Travel News
Travel News

With the depreciation of the rupee and a rise in crude oil prices beginning to pinch them, airlines in India have begun raising fares. Since Thursday, Jet Airways has started levying a surcharge of $50 on the economy class fare on its Gulf flights. SpiceJet, is planning to increase the surcharge on its domestic flights.

Domestic airlines have so far been shy of revising fares, fearing it would hit passenger traffic. Air fares are about 20 per cent lower year-on-year despite the rising costs.

From Thursday, Jet Airways began levying the additional surcharge on its flights to Dubai, Kuwait, Doha and other destinations in the Gulf. The $50-dollar surcharge is being levied only on higher-level economy class fares and till September 10. There are two reason for the surcharge increase — the demand for travel to Gulf is higher after the Eid holidays and the rise in operating costs as per a report in Business Standard.

Among other airlines, SpiceJet is considering an additional surcharge to meet the cost burden due to rupee depreciation. “The currency has depreciated from 55 to 68 (against the dollar). Public sector oil companies are able to pass on their costs to us but we have been unable to pass the extra charge to passengers,” said an airline source.

At present, airlines charge a basic and fuel surcharge. In addition, there are government and airport taxes. SpiceJet might either revise existing surcharge or create an additional category of surcharge to offset costs incurred due to rupee depreciation. This could be a short-term measure and can be revised once the rupee stabilises and a decision on the issue taken over the next two days, the source added.

According to an Air India executive, charging a separate surcharge was not a wise option and it had no such plans. “Instead of a new surcharge, airlines should stop selling lower-priced fares. The low fares are not sustainable,” he added.

Foreign carriers, too, have begun raising the fares. On Wednesday, Emirates and Kenya Airways informed travel agents of increased fares in all classes.

» Read Complete News.....

(You need to login first to read complete news).
New User? Register for FREE!

» Back to Travel News

Advertisement