Air India to reduce fares from Jan 1December 29th, 2008 - 3:35 pm ICT by IANS
New Delhi, Dec 29 (IANS) A day after Kingfisher Airlines announced a fare cut, national carrier Air India Monday announced a similar fare reduction from Jan 1.”In view of the slackening demand in post-peak season and continued decline in fuel prices, Air India will be adjusting domestic fares downwards on various sectors shortly,” an Air India spokesperson said here.
The spokesperson, however, did not divulge the quantum of fare cut, saying it was still being worked out. “We would be able to come with reduced fares by January 1,” he told IANS.
Private air carrier Kingfisher Airlines Sunday said it would cut fares from the new year.
Kingfisher chairman Vijaya Mallya said in a statement that the airline would begin the new year on an aggressive note by slashing fares. But he did not quantify the reduction either.
Low cost carriers are also expected to follow suit, said an industry official.
Despite the fall in fuel prices, Indian air operators have been unwilling to cut fares, demanding that aviation turbine fuel (ATF) be brought under the “declared goods” category, which would bring down sales tax from an average of 32 percent at various airports to a uniform 4 percent.
The proposal is now before parliament.
Sales tax varies from 4 percent to 32 percent, and accounts for over 35 percent of operational costs of airlines.
Last month, Jet Airways chairman Naresh Goyal said at a function here that he did not favour fare cuts as long as the aviation fuel was not classified as a declared good.
However, air operators started cutting fares following pressure from the government, especially as aviation fuel costs have been slashed, with civil aviation minister Praful Patel urging air carriers to pass on the benefit to travellers.
The lean season ahead also forced the issue for operators.
State governments are likely to oppose the uniform taxation policy as it would lead to revenue loss due to lower sales tax collection.
Over the past four months, there has been a sharp decline in aviation fuel prices. While some air carriers earlier this month reduced the fuel surcharge on the ticket price by Rs.200 to Rs.400, they did not touch the basic fare.
Oil companies have reduced aviation fuel prices seven times since September. The fuel is now sold at Rs.32,691.28 per kilolitre in Delhi after prices were slashed by Rs.4,208.37 in the first week of December.
- Jet Airways, Air India announce fare cuts (Lead) - Dec 29, 2008
- Air India announces fare cut up to 82 percent - Dec 30, 2008
- Airlines unwilling to reduce fares - Dec 22, 2008
- Air India slashes fares, says more cuts likely (Lead) - Dec 30, 2008
- Jet fuel price cut by Rs.622 a kilolitre - Dec 31, 2011
- Oil firms cut jet fuel prices by 1.38 percent (Lead) - Dec 15, 2011
- Oil firms increase jet fuel price by 3.70 percent - Nov 30, 2011
- Fears on Kingfisher's viability grow, seeks government help - Nov 11, 2011
- Domestic airlines' 2011-12 losses around Rs.10,000 crore - May 03, 2012
- Government rolls out plan to help domestic airlines (Roundup) - Feb 07, 2012
- Patel asks airlines to cut fares - Dec 16, 2008
- High taxes reason behind rising jet fuel: Ravi - Nov 30, 2011
- Air India to import jet fuel directly - Jun 07, 2012
- Jet fuel price cut by Rs.1,974 a kilolitre - Jan 31, 2012
- Jet fuel price cut by Rs.350.70 a kilolitre - Feb 16, 2012