Fuel surcharges cut to match oil prices
Sep 20, 2016- Domestic flights have become a little cheaper as airlines have slashed fuel surcharges to match a fall in oil prices. The new airfares will go into effect Tuesday.
This is the third time this year that airlines have cut fuel surcharges with the price of aviation fuel hitting a five-year low.
The Airline Operators Association of Nepal (AOAN) said fuel surcharges added to the price of a plane ticket have been slashed by Rs53 to Rs193 depending on the distance.
Last Sunday, Nepal Oil Corporation (NOC) decreased the price of aviation fuel sold to domestic carriers by Rs5 per litre to Rs94 per litre. Following these price cuts, the corporation will make a profit of Rs12.41 per litre of aviation fuel sold to domestic carriers.
“We took the decision in a bid to provide relief to travellers in view of the upcoming Dashain, Tihar and Chhath festivals,” said Bhanu Khanal, spokesperson for NOC.
Airlines are required to cut fuel surcharges when fuel prices drop by Rs4 per litre as per an agreement made between the Civil Aviation Authority of Nepal and the AOAN. They are allowed to increase the surcharge when fuel prices rise by Rs4 or more per litre.
“Lower fuel surcharges have provided relief to Dashain travellers to some extent,” said Prajwol Thapa, chief of the marketing and sales department at Simrik Airlines. However, a number of airline officials said that the cheaper tickets came too late for 90 percent of Dashain travellers as they had booked their seats well in advance.
The last time domestic carriers cut fuel surcharges was on July 4 after NOC reduced the price of aviation fuel by Rs10 per litre to Rs99. Airlines then slashed fuel surcharges by Rs115 to Rs384.
According to the data of Tribhuvan International Airport, domestic carriers carried 1.36 million passengers in 2015 against 1.45 million the year before.
Passenger movement has been on a constant decline since 2012 marking a departure from the robust growth rates seen since 2008 when airlines were flying high due to competitive airfares and constant protests and road blockades forcing travellers to take to the air.
Airlines saw a heady growth of 13 percent in 2008 which jumped to 33 percent in 2009 as they cut fares amid stiff competition. Although passenger movement increased 12.83 percent in 2010, the growth rate started dropping in 2011 and has shown a negative growth since 2012.
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