Kingfisher and Jet Airways to reduce fares by Rs 1000

India’s two largest private airlines,Kingfisher and Jet Airways, are likely to reduce fares by up to Rs 1,000 on domestic routes by Dec 2008.

Last week, oil marketing companies had announced a 17% cut in aviation turbine fuel (ATF) prices, while the government reduced customs duty on jet fuel by 5%.Including this the aviation ministry and the government has given them series of benifits to the Airlines industry.

Following this, Air Fuel prices in the metros have come down between Rs 44,965 and Rs 53,663 per kilolitre, a 20% drop from last month. The airlines also received an extension to pay off their fuel dues worth Rs 2,000 crore. However, the customers are yet to get any relief.

Oil companies relaxed the credit period for Airlines

The group on Wednesday gave domestic airlines more freedom on the issue of fuel supplies from state-owned oil marketing firms such as BPCL,IOC,HPCL etc.. and also they have warned against sacking employees(the one which happend with Jet Airways).At a meeting of representatives of airlines and oil company executives, called by oil minister Murli Deora and attended by aviation minister Praful Patel, oil firms agreed to increase the credit period from two months to three and the airlines agreed to clear the accumulated dues in equal instalments by March.But there won't be any reduction in the fares for fliers. "Why should we cut fares when we are losing money?" said industrialist Vijay Mallya but expressed satisfaction with the meeting's outcome.Kingfisher,Jet Airways and Air-India who owed heavily to oil marketing firms.