Your air travel will get more expensive, know why
Rising fuel prices, intense competition and inability to pass on spiralling expenses have been negatively impacting the domestic Airlines.
New Delhi: As peak travel season is round the corner, Airlines are all set to pass on higher costs to passengers following the government’s recent decision to hike customs duty on aviation turbine fuel.
As per Zee Media sources, the Airline companies will not make upfront increase in the ticket fares. Instead they will undertake several measures to increase their ancillary revenue.
Rising fuel prices, intense competition and inability to pass on spiralling expenses have been negatively impacting the domestic Airlines.
Government last month decided to impose 5 percent customs duty on ATF, which is a major component of an airline’s operational costs.
Zee Media sources said that there are five areas under which Airlines are working to garnering more ancillary revenues. These include higher charges on flight cancellation, trip rescheduling, onboard meals, baggage fees and cargo charges or additional baggage charges.
In recent weeks, airline industry had already indicated that air ticket prices could go up in October when the peak travel season begins.
Steep rise in fuel prices and fall in the rupee value are already putting acute pressure on profits of Airlines in the country. Sources said that Airlines can not take the risk of passing the entire burden via air ticket hike, but such back-door measures will help them generate the much needed revenue withouth hiking the yield.
Sources said that various Airlines that currently have an ancilliary of 16 percent, plan to increase it by 25 percent or more.
