Hike in fuel surcharge pushes up airfaresAir tickets have become more expensive with domestic airlines hiking the fuel surcharge after Nepal Oil Corporation (NOC) raised the price of aviation fuel.
Air tickets have become more expensive with domestic airlines hiking the fuel surcharge after Nepal Oil Corporation (NOC) raised the price of aviation fuel.
The Airline Operators Association of Nepal (AOAN) on Monday gave the green light to its members to jack up the surcharge in line with increased fuel prices. On Sunday, NOC increased the price of aviation fuel sold to domestic carriers by Rs4.50 per litre to Rs104.50 per litre.
The fuel surcharge that is added on to the cost of a plane ticket has been raised from Rs40 to Rs200, depending on the distance, airline operators said. The government controls the price of a plane ticket, and airlines are not allowed to increase the airfare, but they are permitted to revise the surcharge if fuel prices fluctuate by at least Rs4 per litre.
Following the revision, the normal fare on a flight from Kathmandu to Dhangadhi, the longest domestic route, will cost Rs13,070, including Rs4,615 fuel surcharge and Rs200 airport tax. A ticket on the shortest flight, Kathmandu-Simara, has gone up to Rs3,210, including Rs940 fuel surcharge and Rs200 airport tax.
“When the price of fuel goes up, airlines have no options. They are forced to increase the fuel surcharge and the burden is passed on to passengers,” said Rupesh Joshi, senior executive manager of Buddha Air.
However, the increased airfares are unlikely to put a dent in travellers’ wallets with an intense price war going on, he said. Airlines are competing to fill seats by slashing airfares due to low travel demand. Normally, travel demand drops during the monsoon season. This is also the off-season for tourism. Airlines expect good business from next month with the start of the tourist season and the annual festive rush when hordes of Nepalis fly home to be with their families to celebrate the holidays.
“Unlike in past years, domestic airlines are having a hard time with the US dollar rising sharply against the Nepali rupee,” said Joshi, adding that airlines had to buy almost all aircraft parts in foreign currency. “Fuel prices as well as the dollar are expected to increase further, and it could affect domestic airlines greatly,” he said. “Airlines face bad days ahead.”
The year 2017 was a bumper year for domestic airlines as they recorded a 39.47 percent jump in domestic air passenger movement following the addition of new aircraft to cater to the growing number of air travellers.
Domestic airline companies saw the movement of a record 2.45 million passengers in 2017, as travellers chose to fly rather than drive over landslide-prone, dilapidated national highways, according to Tribhuvan International Airport (TIA). With larger fleets, the Nepali skies saw an average of 255 domestic flight movements per day last year, up from 200 in 2016.