Possible price hikes in Indian airfares

Airlines operating in India are warning passengers that airfares within the country may be going up, and there’s nothing they can do about it. On one hand, new privately-owned high-tech airports set to open net month in Hyderabad and Bangalore say the increased costs of the modern facilities must be recuperated from passenger tarrifs. On the other hand, airlines will be forced to pay more for their catering services at these airports, saying that if Union Budget doesn’t come up with a solution, the cost will be factored into tickets.

An airline official describes the situation as, “Airports Authority of India (AAI) levies a 2% cess on the total catering bill. But Bangalore airport has told us it would charge 11%, on which we will have to pay a 5% service tax. Hyderabad airport will levy a 15% cess, on which also service tax is applicable.

A snack costs Rs 125-Rs 130; a breakfast Rs 170 to Rs 180 and a hot meal comes for about Rs 250. We can either cut down meal size by offering lesser number of items or lesser quantity of the things that are currently offered.”