Friday, Mar 21, 2003
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By Our Special Correspondent
``The Government is keeping a watch over the situation,'' the Minister told reporters today. Flights to Kuwait, Dammam and Bahrain would continue as per schedule. Disruption would occur whenever the airspace was closed. AI and IA would suffer a loss of about Rs. 110 crores every month. The two carriers would also have to take into account the detour of 90 minutes to circumvent the war zone, needing more fuel to fly to their destinations.
On the possibility of imposing war surcharge, Mr. Hussain said it could not be ruled out.
Following a massive increase in the prices of aviation turbine fuel (ATF), IA announced a 15 per cent hike across-the-board in its fares. According to an IA release tonight, the hike will be effective from March 26. The hike had nothing to do with the U.S.-led war on Iraq, Mr. Hussain said. Air India would take a decision later.
Mr. Hussain said the decision to increase the IA fares was taken following a 44 per cent rise in the international prices of ATF since December last. IA had sought the permission of the Civil Aviation Ministry for a hike of at least 10 per cent in its fares about three weeks ago.
Air India, too, has made out a case for increasing its fares by 10 per cent due to the progressive increase in the ATF prices from 101 cents a gallon in December last to 144 cents on March 15.
In domestic terms, the ATF prices had gone up from Rs. 20,150 a kilo litre (kl) in December last to Rs. 25,200 a kl in March, due to the uncertainty in West Asia. In such a scenario, IA's fuel bill is likely to cross Rs. 1,300 crores in 2002-03. Jet Airways and Air Sahara are also likely to follow suit. Travel industry sources estimate a dip of about 30 per cent in tourist arrivals in India following the Iraq. Lufthansa has reduced its flights schedule to the Middle East for today and tomorrow. Flights to Tel Aviv from Frankfurt and Munich were cancelled as were flights ex-Frankfurt to Amman, Beirut and Kuwait via Dammam.
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