Rise in airfares likely after jet fuel prices go up by 2 pc

Written by: Pti
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New Delhi, Jan 17 (PTI) After a two per cent hike in jetfuel prices, airline officials today indicated a rise inairfares with Civil Aviation Minister Praful Patel saying theMinistry intervenes in such matters only if the increase isunjustified.

Officials of Jet Airways and Kingfisher Airlines gaveindications that the rise in costs would have to be partiallyborne by the air travellers though they did not directly saythat the fares would rise soon.

"Airfares are governed by the airlines only and thegovernment does not intervene. Government intervenes only whenthe hike is unjustified, as the DGCA did in December last. TheCompetition Commission had also intervened then after the spotfares rose suddenly (during lean season of November)," Patelsaid in reply to questions.

However, he maintained that when cost of aviation turbinefuel (ATF) rises, "it is natural that it will have an impacton the fares."

Asked when was an airfare hike likely following theseventh increase in ATF rates since October, Jet Airways chiefNaresh Goyal said, "If costs rise, how can it not getreflected (in fares). If you run a business, you can''t sell anitem costing Rs ten at Rs eight unless you decide to gobankrupt."

Both Goyal and a Kingfisher official, requestinganonymity, did not directly say when the prices would rise orby how much. Top IndiGo officials too did not respond tosimilar queries.

ATF rates in Delhi were hiked last week by 1.98 per centto Rs 48,764 per kl. The latest hike came on the back of a Rs935 per kl hike from January 1 and a massive 3.6 per centincrease on December 15.

Fuel cost accounts for almost 40 per cent of an airline''stotal costs.

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