Express delivery firms urge reduction in fuel surcharge

Express Industry Council of India (EICI), which represents the express delivery service firms, Tuesday asked for withdrawal of fuel surcharge (FSC) levied by domestic airlines.

The industry body made the demand citing sharp fall in global crude oil prices, that have reduced by nearly 35 percent over the last one year.

The trade body pointed that currently domestic airlines' FSC range between Rs.13 and Rs.16.50 per kilogram as fuel surcharge.

"Currently, the ATF (air turbine fuel) price is 10 percent lower than the 2008 price but the FSC charged is as high as Rs.16.50 per kg for the cargo shipments," said Vijay Kumar, chief operating officer, EICI.

"In the past as well when fuel prices fell, airlines continued to increase their FSC. Airlines need to appreciate that FSC is purely a tool to mitigate volatility and cannot be part of cargo rates."

Kumar added that bringing down the transaction costs of the Indian businesses including the large number of micro exporters, medium and small enterprises that use air cargo will aid governments "Make in India" campaign.

According to EICI, the industry has sought the intervention of civil aviation ministry and the Director General of Civil Aviation (DGCA) for an immediate redress of the issue and for market driven mechanism for determining prices.

Fuel surcharge on shipments is levied on a per kilogram basis and was introduced in May, 2008 to mitigate volatility in fuel prices.