To make
its fare structure more transparent, Air India is launching a dynamic fuel
surcharge system, where the amount a consumer pays for travel would change (even
decrease) in tandem with the regular alterations in the price of the aviation
turbine fuel (ATF). The new charge may be called "fuel pass through", according
to a source in the airline.
According
to the formula being worked out, the company would raise the fuel charge by Rs
50 for every Rs 1,000-per-kilolitre increase in the rates of jet fuel.
Inversely, there would be a slide in the fares by the same amount in case of a
Rs 1,000-per-kl decrease.
"We
are working on this," said a senior Air India official. "It will be implemented
in a month."
He said this would make the system "much more transparent" than the existing
fuel surcharge, which is not directly proportional to the price of ATF. "We plan
to call it 'fuel pass through'," he revealed. It will both increase and decrease
in accordance with the change in ATF price."
The carrier, he said, was not currently discussing the idea with any other
airline. "Usually, the industry follows whatever we do. We hope that happens in
this case as well," he added.
In the existing system, a fare has two components - base fare plus surcharge
and then fees on passenger services and development. The surcharge and fee
component in an airline ticket is around 40 per cent of the total fare in an
economy-class ticket and around 15 per cent when it comes to business class.
Consumers have for long been complaining that the current fuel surcharge
component is not dynamic, as it tends to stonewall the routine variations in the
price of ATF.
The Travel Agents Federation of India, too, notes that fuel surcharge has
seldom decreased in the last five years even when there has been a slide in the
prices of ATF.
"In any case, why do we need a fuel surcharge component in the fare," asks
Ajay Prakash, president of the association that represents half of the country's
travel agents. "One can tinker with the fare to adjust the increase or decrease
in the input cost."
Further, in case of cancellations or no show, the airlines do not refund the
fuel surcharge. Thus, Air India's proposed move, Prakash noted, would be "a step
ahead in making things more transparent".
Not all are convinced that this upcoming system would make a difference to
air travellers. These are all internal matters, notes Makemytrip.com. "A
consumer is not bothered about any of these technicalities," shrugs Keyur Joshi,
co-founder and chief operating officer of the online travel portal.
No comments:
Post a Comment