Airlines want to come clean on fuel surcharge controversy

Written by Shaheen Mansuri | Mumbai, Dec 18 | Updated: Dec 19 2007, 06:20am hrs
Airlines in the country, which had been pulled up by the Directorate General of Civil Aviation (DGCA) on pricing of tickets, want to now come clean. The Directorate General of Civil Aviation (DGCA), on December 4, had sent circulars to airlines, seeking an explanation as to why they clubbed fuel surcharge and congestion cess with other taxes in tickets.

According to sources in the DGCA, the taxes, which should not be included with fuel surcharge, is to be deposited with the government for use of the facilities at the airport.

Hitesh Patel, executive vice-president, said, Kingfisher Airlines, We shall reply to the DGCA on December 19 explaining the basic structure of the tax and surcharge components in our air tickets. We charge a passenger service fee of Rs 225 that is passed on to the government. The fuel surcharge of Rs 1,250 and congestion cess of Rs 150 is charged separately.

He added that the airline does not do anything unlawful.

Similarly, Jet Airways CEO, Wolfgang Prock-Schauer, said, We have always maintained the fuel surcharge as such, and never put it as a tax. In our paper ticket stock, this charge rightfully appears in the tax, fee and charge section, separated from government taxes. In our e-tickets, fuel surcharge is treated separately from other government taxes. He added that this is compliant with IATA standards. Therefore, the question of misleading passengers does not arise.

Jeetendra Bhargav, director (PR), Air India, said that the circular is not applicable to the airline since it has been following the rule of charging government taxes and fuel surcharge separately. We have been submitting the record of the taxes deposited with the government. Without divulging any name, an official from Air India added that the DGCA has said that the fare shown on the airlines website has revealed that the airfares have two components, the basic fare and the taxes. It is not clarified as to whether components like PSF and fuel surcharge are included in the basic fare or have been clubbed under the heading taxes. In view of the ambiguity in the airfares, the DGCA has sought a clarification from the airlines, says the official.