With largest-ever hike in ATF prices, airlines renew call for lower fuel taxes
ATF prices were raised 7.6% recently, the largest-ever increase in absolute numbers, as international oil prices rose and the rupee remained weak versus the US dollar.
The spectre of further price hikes looms large, with oil companies demanding a hike in prices of various petroleum products, including petrol, diesel and cooking gas, to lower their subsidy burden. The union minister for petroleum and natural gas, S Jaipal Reddy, has however, ruled out an immediate price hike.
To counter the price hike, airlines this week raised the fuel surcharge by R150 to R250 on domestic routes and R825 on international routes, making travel costlier.
Naresh Goyal-promoted Jet Airways and media baron Kalanithi Maran-promoted SpiceJet reported slim profits in the first quarter of the 2012-13 fiscal after five straight quarters of losses.
“The increase in fuel surcharge is just to break even and counter the last increase in ATF prices,” said a senior Jet Airways official. “If we didn’t increase the price, we would have slipped back into the red.”
Dinesh Keskar, senior vice president sales (Asia Pacific & India), with jet maker Boeing, agreed that airlines would have gone back to losing money if they hadn't raised prices.
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