Airfares rise 30%, Ajit seeks tax relief       Published on : Jun 07 2012
TNN | Jun 7, 2012, 06.05AM IST
NEW DELHI: Flying within the country this summer holiday could give you the feeling of buying a ticket for international travel. Spot domestic airfares have gone up by about 25% to 35% as Kingfisher is operating a curtailed schedule, Air India is hit by pilot strike and taxes have gone up significantly.

For instance, a leading full service carrier was offering a one way ticket on Delhi-Mumbai for travel on Thursday (June 7) in the range of Rs 31,400 to Rs 42,476 for business class and Rs 7,200 to Rs 23,385 for economy class. Low-cost carriers (LCCs) were offering one-way tickets on this route for Thursday in the range of Rs 8,200-13, 000.

"There is nothing like lowcost flying here now. Fares are up by about 30%. While airlines face the highest operating cost scenario in India due to mind-boggling aviation turbine fuel (ATF or jet fuel) prices and taxes, they should not take advantage of situation when demand surges like this," said Rajji Rai, special advisor to Travel Agents Association of India ( TAAI).

Fares on metro routes and to holiday hotspots, essentially Srinagar, are up by more than the average 30%. Oneway fares on LCCs for Delhi-Chennai now start from Rs 9,800, while this used to be over Rs 6,000 earlier. For Srinagar , hardly a seat is available even for Rs 14,000-15 ,000 one-way . "Flying is now becoming unaffordable unless people buy tickets in advance. Many people now want to know if they could get a train ticket if they have to travel on a short notice. Fares have never been so high," said Anil Kalsi, former head of TAI and a leading travel agent.

Aviation minister Ajit Singh on Wednesday said he would ask the Directorate General of Civil Aviation (DGCA) to keep a hawk eye on fares. But industry insiders pointed out there's nothing that the DGCA can do as airlines have to give a range of fares for each route that they would charge that month. So if an airline says it would charge between Rs 3,000 and Rs 60,000 for a Delhi-Mumbai flight, there's nothing the regulator can do if it sells tickets for Rs 50,000. Singh estimates the removal of service tax cap of Rs 100 on a domestic ticket and Rs 500 for international and very high taxes on jet fuel have made flying more expensive by up to 20%. "ATF in India accounts for 40%-50 % of an airline's total cost and is more expensive than Singapore, Hong Kong, Dubai, London and Abu Dhabi. States charge up to 30% sales tax on ATF. I have requested the finance minister to rationalize these two items," Singh said.

Up in the air

The aviation ministry will ask DGCA to keep an eye on fares But the regulator can't do much because airlines declare their own range of fares for each route every month The aviation minster says the removal of service tax cap on air tickets has made flying expensive by up to 20%
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