Private airlines slash fares

Tuesday, December 30, 2008 at 2:12 am

Private air carriers Jet Airways and Kingfisher on Sunday (December 28) announced reduction in fares following steep fall in Aviation Turbine Fuel prices.

While Jet Airways said it was reducing air fare ranging 15-40 per cent from Monday, Kingfisher Airlines said it would effect fare cut across its network from January 1.

“Jet Airways is reducing basic fares ranging from 15-40 per cent across most of the domestic flights with effect from tomorrow,” a Jet Airways spokesperson said.

The fare cut would be across all domestic sectors, the spokesperson said tonight.

Civil Aviation Minister Praful Patel had repeatedly asked the airlines to pass on the benefit of sharp drop in ATF prices to passengers.

Earlier in the day, Kingfisher Airlines said it would effect a fare cut across its network from January 1.

“Kingfisher Airlines will begin the New Year on an aggressive note by slashing fares on its network,” Kingfisher Airlines Chairman, Vijaya Mallya, said in a statement in Mumbai.

He, however, did not specify the quantum by which fares would come down.

The current low prices of ATF allows Kingfisher to pursue an opportunity to significantly increase market share by offering the fine five-star flying experience at reduced fares, he said.

Earlier, Kingfisher had said that it would effect fare cut only after the government classifies ATF in the Declared Goods category.

The airlines across the board are demanding the Government to classify ATF in the Declared Goods category. Under the declared goods category, there will be a uniform 4 per cent sales tax on air fuel across the country.

The proposal is now before the Parliament.

However, several state governments are likely to oppose the uniform taxation as it would cause revenue loss to them. Now, the sales tax varies from four per cent to 32 per cent, and accounts for over 35 per cent of airlines’ operational cost.

Over the last four months, there has been a sharp decline in ATF prices. While some air carriers earlier this month reduced the fuel surcharge between Rs 200 and Rs 400, they did not touch the basic fare.

(With inputs from agencies)

( This post is from an independent writer. The opinions and views expressed herein are those of the author and are not endorsed by APakistanNews.Com.)

Private airlines slash fares

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