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IA rules out hike in passenger fares

Our Bureau

NEW DELHI, Sept. 26

INDIAN Airlines (IA) has ruled out a hike in passenger fares for now although a surcharge is to be levied to off-set the additional insurance premium being imposed on airlines globally in the wake of the untoward incidents in the United States on Septemb er 11.

``There is no way any airlines, leave alone IA can afford to survive with a hike in fares at this stage. The industry as a whole is facing huge cancellations and the last thing anybody wants to do is turn away passengers by hiking fares,'' official sourc es said.

The imposition of surcharge would result in an additional burden of several million dollars as the annual passenger carriage of the airline is between 5.5-6 million.

Officials refused to speculate on the impact of the proposed surcharge or whether the entire surcharge would be absorbed by the airline or a portion would be passed on to the consumer.

Similar views were expressed by a senior official of a middle eastern carrier operating to India. ``Hiking fares will be spell disaster. But the airlines will have to find a way to absorb the burden as with wafer thin margins the global airline industry will go under if it is forced to absorb the entire burden,'' the official said.

In a related development, it is reported that the Dutch carrier, KLM, has started charging its passengers a $5 per flight extra fee to help cover for extra safety measures it was taking after the attacks in the US.

While the proposed surcharge in India is to see fares move northwards, officials indicated that this could not be termed as a fare hike as it was something which could be reviewed when the situation changes. It may be recalled that the Government had onl y recently raised the passenger security fee to Rs 200 per ticket to provide for better security in the aftermath of the hijacking of an IA aircraft to Afghanistan.

IA, like airlines around the globe has been badly affected in the post 11 September period with insurance underwriters insisting that airlines pay the $1.25 per passenger insurance surcharge.