Airlines Board To Settle Issue Of Surcharges

Air-India has called a meeting of the Board of Airlines (BAR) tomorrow to settle the issue of surcharges being levied by international airlines on tickets ex-India. As a fallout of the steep increase in international insurance premium on air fares after the September 11 terrorist strikes on New York, international airlines have levied per ticket surcharges ranging from zero to $8 (Rs 375) to recover increased insurance costs that have become effective from October 1.

Airlines such as Singapore Airlines (SIA) and Austrian Airlines have demanded that the surcharge be further hiked to cover the increased costs of operations.

International insurance companies have, however, levied a surcharge of only $1.25 per passenger on all airlines to offset the heavy outgo towards claims in the aftermath of the terrorist attacks in the US on September 11. An additional charge of 0.05 per cent of fleet value is also being demanded.

Executives from a cross-section of airlines and travel agents contacted by Business Standard said that it was likely that the board would agree to raise the surcharges from their existing levels.

A Lufthansa spokesperson said that the surcharge of $8 per ticket had been levied for the additional costs incurred as a result of tighter security measures, insurance premiums and other fixed cost items. Lufthansa has taken 28 of its airliners out of service and has cut flights on several routes.

British Airways, however, said that it had no current plans to impose a surcharge similar to other international airlines. Air-India has not taken a decision yet on the quantum of the surcharge. The airlines representatives are also expected to clear the winter schedules for the carriers at the meeting to be held in Mumbai. The Board of Airlines is a forum at which all ex-country airfares are negotiated and decided by airlines. Airlines generally stick to the fares arrived at these meetings with a country's national carrier providing the benchmark prices.