Air India slashes domestic fuel surcharge

Flag carrier Air India is all set to reduce fuel surcharge on all domestic flights by Rs 400 from tomorrow, making it the first airline to slash fares after a substantial cut in jet fuel prices.

The airline currently levies a fuel surcharge of Rs 2,750 on flights up to 750 km and Rs 3,100 beyond that distance.

The surcharge will now be reduced by Rs 400 effective for all bookings made from tomorrow, an Air India official said today. "This will amount to a reduction of 14.5 per cent on total fare," the official said.

State-run oil companies had last week cut aviation turbine fuel (ATF) prices by Rs 2,480 per kilolitre, effective from December 1, the sixth such cut since August this year.

Besides reducing ATF prices, government has abolished five per cent customs duty on jet fuel.

It is also planning to amend the Central Sales Tax Act in the coming session of Parliament to include ATF in the list of declared goods so that only a flat four per cent tax is imposed on it across the country. At present, state sales tax ranges anything from four to 30 per cent.

Civil Aviation Minister Praful Patel had earlier appealed to airlines to cut fares and reciprocate the measures taken by the government to help the ailing industry.