Airlines play it cool with hikes in jet fuel

Despite ATF prices increasing thrice in the past 30 days, airfares have remained constant, but experts caution of a possible hike

Airlines that provoked condemnation from passengers and aviation authorities with reckless hikes in airfares until recently, are now surprising them with their patience.

In spite of three hikes in jet fuel prices over the last four weeks two in January itself they haven't stepped up the fares.

Earlier hikes

Since December 15, 2010, the Auto Turbine Fuel (ATF) prices have been increased on three occasions: by 3.6 per cent, 2 per cent and again 2 per cent approximately.

But the airfares have been stable, with a few exceptions where airlines have increased the fuel surcharge.

"Airfares are comparatively better than what they were two months ago, when the arbitrary hikes became a controversy.
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It is surprising that airfares are unaffected despite three hikes in less than a month. Though, it may go up," said Devang Sanghvi, who runs an Andheri-based travel agency.

Jet fuel will now costRs 49,046 per kilolitre in Mumbai, as against Rs 48,058.56 before the hike.

Another tour operator from Andheri said, "I think the prices will soon increase. And this time, with the current increase of two per cent, the airlines have a valid reason.
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But we will have to wait and see how they adjust the hikes."

Sources from aviation ministry reveal that airlines are under pressure from the Civil Aviation Economic Advisory Council to restrain fares, as they already brewed a controversy after increasing airfares at the last minute.
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"I doubt if airlines will increase fares as they have just emerged from a controversy. Also, the aviation ministry may not agree to any hikes," said an official from the ministry.

To put things in perspective, the fact cannot be ignored that when ATF prices were subsidised for airlines last year, the fares remained unaffected.
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"No change in ticket prices was made by the airlines," said a tour operator.

Minister speaks

However, Civil Aviation Minister Praful Patel said, "Airfares are governed by the airlines alone. The government intervenes only when the hike is unjustified. It is natural that an increase in ATF prices will have an impact on the fares."

MiD DAY first reported about airfares touching an all-time high on November 13. We revisited the fares on November 23, and found the airfares to be the same.

After MiD DAY's report, the regulatory body for airlines, Directorate General of Civil Aviation (DGCA), issued a circular to ensure transparency in the fares.

The circular commanded airlines to furnish a copy of route-wise tariffs across its network in various fare categories, in the manner it is offered in the market, to DGCA on the first day of every month.

Rs 49,046
Price of jet fuel per kilolitre in Mumbai now

Rs 1,000
Approximate increase in the price of jet fuel per kilolitre after the hike