Airlines get relief from Government but make passengers pay Transaction Fee

The battered India airline companies received a lifeline from the government on October 31.

The 5% Customs duty on Aviation Turbine Fuel (ATF) has removed. In addition the government controlled oil marketing companies have announced a price reduction of Rs. 6,000 per kilolitre on ATF.

These two steps, will result in an about 17% reduction in prices, but predictably, airlines have chosen to hoard the price reductions to buttress their shattered financials, and say it is too early to say whether the drop can be passed on to customers in the form of lower air fares.

Adding insult to injury, airlines will force, their customers to start paying the “transaction fee”on air tickets from November 1, 2008. The fee will hike domestic fares by up to Rs. 500 and international travel by up to Rs. 10,000 a ticket. This fee will be payable even on refund tickets.

Please see the tags “Transaction Fee” for articles on this subject.