Jet Airways cuts fuel surcharge –fares down by Rs400
06 Dec 2008
Mumbai: The country's largest private carrier, Jet Airways, and its subsidiary, JetLite, have reduced fuel surcharge levied on a ticket by Rs400 and Rs300 respectively in line with a similar reduction by flag carrier Air India. The move follows substantial reduction in the price of aviation turbine fuel (ATF) as a result of steps initiated by the government and oil marketing companies.
The cut in fuel surcharge will bring down airfares by the same amount. Air India had reduced fuel surcharge by Rs400 on Wednesday.
With Air India and Jet Airways bringing down fares through these reductions, pressure is bound to build up on other carriers to follow suit, particularly Kingfisher Airlines, the country's second-largest private carrier.
However, Kingfisher chairman Vijay Mallya has declared that his company would reduce fares only if jet fuel gets a "declared goods" status. Such status would allow ATF to be taxed at a uniform 4% rate across the country. Currently, tax on ATF in various states ranges between 4-25%.
The price of ATF has dropped nearly 50% since August.
Airlines have always asserted that ATF costs account for nearly 45% of an airline's operating costs.
