In a few sectors Indian domestic airlines have been offering tickets for Rs. 5,. But even for the cheapest tickets, you actually end up paying more than Rs.2500 extra for taxes and surcharges. Now, what are these extra charges?
Jet fuel accounts for 40% of the operating costs for domestic airlines; the domestic industry spends about Rs.7543 Crore on fuel bills. With the latest hike, the additional costs/ticket is Rs. 2025/ and the break-up is something like this:
Fuel surcharge = Rs. 1650/-
Congestion surcharge = Rs. 150/-
Passenger service tax = Rs.225/-
Also aviation fuel is much more expensive in India - 70-90% higher than international rates. At Delhi it is Rs.47,444.14/kiloliter and at Mumbai it is Rs.49,061/kiloliter.
The Federation of Indian Airlines (FIA) estimates that the rates were brought closer to international rates, it would result in an annual saving of Rs.2496 Cr. ($624m).
Why the big difference?
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Source: P.R Sanjai, LiveMint, 1 Dec., 2007
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