05-28-08, 03:31 AM
|
#1 |
| Bronze Member
Join Date: Feb 2007 Location: Cochin
Posts: 243
Rep Power: 3 |  Get set for cess on check-in baggage
Quote:
As the government toys with various permutations and combinations on price hikes, duty cuts and, now, a cess on income-tax to tackle soaring crude prices, airlines are preparing to take action. After American Airlines slapped a $15 charge on each piece of checked-in baggage, airlines in India are planning to follow suit. With crude staying firmly over $130 a barrel, consumers have to be prepared to rework their budgets for fuel, groceries, travel and, perhaps, even income-tax.
Airlines, which have seen an over 40% jump in fuel costs over the past quarter, are now considering a proposal to impose a special levy on checked-in luggage to set off the increase in fuel costs. Apart from hiking fuel surcharge from July 1, major airlines like Jet Airways and Kingfisher are considering a baggage fee-additional payment for your checked-in baggage. This is the first time airlines are planning to charge extra even if you do not have excess baggage.
As of now, airlines allow passengers to check in at least a couple of bags as long as they are within a stipulated weight limit. While full-service airlines allow passengers to check in around 20 kg of baggage, low-cost players allow smaller weights.
Passengers are asked to pay extra only if they have baggage in excess of the weight they are entitled to carry.
For sometime, low-cost players have been trying to find ways to generate revenues through baggage, but full-cost carriers are exploring this avenue now since fuel prices have hit record highs. While there was a suggestion that passengers should be allowed only one checked-in baggage and one-hand baggage free, the current discussion is about an extra charge right from the first piece of baggage.
In any case, fuel surcharge is being raised from July 1 - the range of hike is expected to be Rs 250-350 per sector. It is estimated that prices of aviation turbine fuel (ATF) would go up by 7% from next week and airlines plan to hike charges by Rs 250 for short-haul sectors and Rs 350 for long-haul sectors. The details would be finalised over the weekend, industry sources said. As of now, fuel surcharge stands at Rs 2,350 for long-haul sectors and Rs 1,950 for short-haul flights.
This comes even as several options, including a fuel cess on income, are being tossed around to meet the fuel-subsidy bill. The government, it would appear, is in several minds with varied statements being issued at every hour.
So while a possible imposition of a fuel cess on income was one of the options to mop up additional revenue, a hike in petrol and diesel prices by Rs 2 and Re 1 a litre, respectively, also remains a high possibility. Petroleum minister Murli Deora held meetings throughout the day to work out a possible solution to the 'abnormal price hike'. And even as differences remain within the finance and petroleum ministries over duty cuts, sources said the government may set up a special group of ministers to break the logjam.
Fuel prices have always been a politically-sensitive issue. A decision on a hike will have to be taken at the highest political level, a source said.
| Get set for cess on check-in baggage- Indicators-Economy-News-The Economic Times |
|  |
Linear Mode
Similar Threads 
