July 04, 2007

Result of the rising jet fuel prices

The jet fuel rise has became a major concern for airlines. In India, the high jet fuel prices, has constituting as it does around 40 of operating costs. for the increase of fuel cost in 1 percent made into a burden of 1.5 percent on airlines from the additional dealers’ commissions and more working capital.

Domestic jet fuel prices are linked to international oil prices, which have been volatile since the beginning of the financial year. Except in June, they have been rising constantly. “There is no certainly for the next month.

They should remain at this level. But in winter prices are set to go up steadily,” said an oil industry analyst asking not to be named, as informed by Hindustan Times

Indian airlines have suffered a loss of more than Rs 2,000 crore in the last two years and are fast reaching a consensus on gradually raising fares to reduce the bloodbath. Kingfisher Airlines Chairman Vijay Mallya, soon after picking up a 26 per cent stake in Air Deccan, announced that fares in the budget carrier would go up by Rs 500 per seat.

The increased fuel surcharge by Rs 50 following the rise in jet fuel prices. This is happen on Jet Airways, Kingfisher Airlines, Air Deccan, SpiceJet, GoAir and Paramount Airways. The total fuel surcharge now amounts to Rs 950 per ticket.

In addition, airlines are also charging Rs 150 as a congestion surcharge because of the excess fuel burn and additional burden on equipment and manpower caused by bottlenecks at major airports.

Read the news release of this article's source at:
That plane ticket just got costlier by Lalatendu Mishra, Hindustan Times

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