AI top brass working on fare reduction

New Delhi, Nov 24 (PTI) In a bid to boost the air traffic
growth rate, Air India's top brass has started working on
slashing the carrier's fares following considerable reduction
in jet fuel prices.

"We are working on it, but at this moment, we cannot
specify the quantum or from when this (reduction in fares)
will be effective," a top airline official, who preferred
anonymity, told PTI.

Sources said the cut in Air India's fares on the domestic
sector could range between 10 and 12 percent, but the official
refused to confirm.

Steps could also be taken to slash fuel surcharge and
tinker with the congestion surcharge, the sources said, adding
that the fare reduction could be made effective in December
itself.

Renewing his pitch for making air travel cheaper, Civil
Aviation Minister Praful Patel had last week asked all the
carriers to slash fares in response to the government's
support to the aviation industry to meet the financial crisis.

On its part, the government has asked oil marketing
PSUs to extend credit period and allow airlines to clear their
dues amounting to about Rs 3,000 crore by March next year. It
has also abolished the five percent customs duty on Aviation
Turbine Fuel (ATF), even as the jet fuel prices were brought
down considerably.

Regarding Air India, Patel had said, "We have never
dictated what Air India should do in terms of pricing or
routes, or capacity. But AI, as a responsible government
carrier, will also understand that if the oil prices are
coming down, so should the fares."

The rate of air traffic growth in the recent weeks, which
is considered the peak travel season, has been on a much lower
level than last year.

The number of flights by all airlines each week fell
from 10,922 in March to 9,635 in October, according to latest
official figures. There has also been a 30-32 percent fall in
passenger traffic respectively at Delhi and Mumbai airports --
the two busiest.

It is yet to be seen whether the full-frill private
carriers are to follow suit, though the Aviation Minister was
optimistic that air fares would come down by December.

Patel's appeal to the airlines came in the presence of
Kingfisher-promoter Vijay Mallya and Jet Airways chief Naresh
Goyal, who had clearly said he would not like to "close down"
his company.

Though Goyal agreed with the Minister on the need to
lower airfares, both he and Mallya pointed toward the
"enormous" losses being suffered by the airline industry. "We
will do whatever the government wants us to do, provided we
are profitable," Goyal had then said.

Jet Airways, which has posted losses to the tune of Rs
384 crore in the second quarter of the current financial year,
has asked senior cadre in the airline, including pilots, to
take a pay-cut between 5 percent and 20 percent.

Two months ago, it had announced retrenchment of 1,900
temporary staff but had withdrawn the decision after the
government made it plain that lay-offs should not be carried
out by any industry.

Mallya also elaborated on the causes of the financial
downturn experienced by the industry, saying high taxes on ATF
and weakening of rupee against US dollar were major reasons
for the losses and mounting debts of the airlines. PTI ARC
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