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Air India fares hiked by 5 per cent; War insurance on AI, IA waived
New Delhi, Mar 25: Air India today hiked its fares across the board by five per cent from April 16 and also decided to impose a fuel surcharge of 10 US dollars per coupon from April One, following a decision to this effect by the International Air Transport Association (IATA).
New Delhi, Mar 25: Air India today hiked its fares across the board by five per cent from April 16 and also decided to impose a fuel surcharge of 10 US dollars per coupon from April One, following a decision to this effect by the International Air Transport Association (IATA).
In another major development on the war-risk insurance issue, Air India and Indian Airlines have bagged a waiver from the insurance companies which had earlier decided to impose a hefty premia on all flights operating from Kuwait and the war zone in West Asia, Civil Aviation Minister Shahnawaz Hussain said here.
The war-risk insurance, which was to be as high as about Rs 50 lakh per flight, would have imposed a tremendous burden on the Indian carriers, he said, but added that both the carriers would still have to bear the burden of flying empty to Kuwait and bringing the Indians working there back to the country.
He said Rs 3,000 worth of additional amount was being imposed on the flights to and from Kuwait to meet the loss to both the airlines. Air India received the formal approval of Directorate General of Civil Aviation (DGCA) for increasing its fares by five per cent yesterday, while Indian airlines and Jet airways have already raised their respective fare rates by 15 per cent.
Hussain said while domestic carriers had raised their fares by 15 per cent, the decision on AI fares at a "lower level of five per cent was taken keeping in mind consumer interests".
Later, ministry officials said the hike in AI fares would be valid on all tickets issued from anywhere in the world and added that there was a "consensus" among the IATA member nations on the fare hike as well as that on the 10 US dollar fuel surcharge. On the waiver on war-risk insurance bagged by the two carriers, the officials said it was due to "pressure" by all governments, including India`s, that the waiver was granted by the insurance companies.
The insurance outgo per flight would have been much higher than the income generated by each flight, they said, adding that the airlines were not in any way operating from the war zone around Iraq.
The insurance firms were also told that the airlines had already planned out operations to avoid the war zone through alternative route plans. New India Assurance Company, which insures Air India and Indian Airlines flights, agreed to grant the waiver, the officials said.
In any case, they said an insurance surcharge was being imposed on flights from and to Kuwait at the rate of 2.5 per cent since November last in anticipation of the US-led war in Iraq.
Bureau Report
The war-risk insurance, which was to be as high as about Rs 50 lakh per flight, would have imposed a tremendous burden on the Indian carriers, he said, but added that both the carriers would still have to bear the burden of flying empty to Kuwait and bringing the Indians working there back to the country.
He said Rs 3,000 worth of additional amount was being imposed on the flights to and from Kuwait to meet the loss to both the airlines. Air India received the formal approval of Directorate General of Civil Aviation (DGCA) for increasing its fares by five per cent yesterday, while Indian airlines and Jet airways have already raised their respective fare rates by 15 per cent.
Hussain said while domestic carriers had raised their fares by 15 per cent, the decision on AI fares at a "lower level of five per cent was taken keeping in mind consumer interests".
Later, ministry officials said the hike in AI fares would be valid on all tickets issued from anywhere in the world and added that there was a "consensus" among the IATA member nations on the fare hike as well as that on the 10 US dollar fuel surcharge. On the waiver on war-risk insurance bagged by the two carriers, the officials said it was due to "pressure" by all governments, including India`s, that the waiver was granted by the insurance companies.
The insurance outgo per flight would have been much higher than the income generated by each flight, they said, adding that the airlines were not in any way operating from the war zone around Iraq.
The insurance firms were also told that the airlines had already planned out operations to avoid the war zone through alternative route plans. New India Assurance Company, which insures Air India and Indian Airlines flights, agreed to grant the waiver, the officials said.
In any case, they said an insurance surcharge was being imposed on flights from and to Kuwait at the rate of 2.5 per cent since November last in anticipation of the US-led war in Iraq.
Bureau Report