Fuel prices turn heat on air fares again

Passengers looking for bargain air-fares for the holiday season had better grab their tickets soon. Domestic airlines are set to increase air-fares, mainly by cutting down their low-priced tickets. The revision is prompted by an increase in aviation fuel prices by the oil companies. Fuel prices went up 4% from Sunday. They have however, decided not to increase the fuel surcharge, that is currently being charged separately from passengers. However, several international carriers have upped the fuel surcharge in response to the firm oil prices. "Fares could harden up to 10% higher than current levels as margins come under pressure," airline sources said.

"The peak season will start from April 15 when airlines would typically restrict sales at the lower fares to a few flights that they find difficult to sell," said SpiceJet director Sidhant Sharma. The airline that has a fleet of 11 planes expects yields to be much higher in the coming months compared to March. National carrier Indian is currently offering the most aggressive fares among the full service carriers today. Based on low fares, the airline is now carrying about 30,000 passengers a day, the highest it has ever managed. Domestic Indian carriers currently charge passengers Rs 700 as fuel surcharge. This surcharge was not reduced even when fuel prices fell earlier this year.

Singapore Airlines has announced that it will increase its fuel surcharge for tickets on its long haul routes between Singapore and North America to $82 (up from $78) per sector, for flights between Singapore and gateways in the United States. The fare on all other flights will go up to $54 (up from $52) per sector. The airline was incidentally, among the first to reduce surcharges when oil prices were softer earlier this year. Sri Lankan Airlines is among the other airlines that will incorporate the fuel surcharge into air fares from April 01, effectively raising ticket prices. International price of aviation fuel is now around $76 per barrel, much higher than the $60 levels two months ago. Fuel price comprises the highest component of an airline’s operating costs.

Courtesy: Economic Times

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