Kingfisher rules out fare cut, for now

Turning down Civil Aviation Minister Praful Patel’s plea for a fare cut, full service carrier Kingfisher Airlines today said that at present there was no case for reducing air fare.

Other airlines like SpiceJet and IndiGo also said that after the recent round of cuts in fuel surcharge, customers should not expect further benefits in the short term, though there would be some advance purchase packages in January.

“The sharp and continuous rise in aviation turbine fuel prices earlier in the year has left a lasting impact on the bottom lines of the airline companies, leading to an accumulation of huge outstandings and liabilities with oil companies. As such, keeping in mind that the cash flow needs to settle these accumulated liabilities, there is currently no case for reduction in fares,” said an official spokesperson for Kingfisher.

“However, once the government brings ATF under the declared goods category, the airline will immediately and significantly reduce fares,” he added.

Last week, hours after Patel requested to airlines to cut fares and pass on the benefits of fuel price decrease to passengers, Kingfisher had announced that a decision on fares would be taken on December 20. However, no decision was taken that day.

“With sales having improved by 10-15 per cent this month compared to the last few months, no airline will be in a hurry to cut fares,” said Mohit Srivastava, head of online sales, Makemytrip.

While national carrier Air India said that they were yet to decide whether to cut fares, executives of low-cost carriers such as IndiGo and SpiceJet said that passengers should not expect more fare cuts in the short-term.

“We will be announcing some advance purchase packages. But passengers should not expect any more benefits close to the New Year,” said SpiceJet CEO Sanjay Aggarwal.

Last Monday, public sector oil companies cut ATF prices by 11 per cent compared to the fortnight starting December 1. The effective cut in ATF prices compared to August prices now stands at 53 per cent. The effective cut since January stands at around 28 per cent.

After Air India, which announced a 14.5 per cent cut in fuel surcharge on December 1, Jet Airways, Kingfisher, SpiceJet and IndiGo also announced a similar cut, which brought down overall ticket prices by 9 per cent for December.