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Look before you fasten your seatbelts
October, 16th 2006

Next time you are booking flight tickets for a holiday abroad or if you going out of the country for business, keep a watch not only on the base fares offered by airlines but also on the fuel surcharge and taxes charged. It can bring down your travel expenses by up to 30%.

For starters, a no-brainer. Fuel surcharge is the lowest among Gulf-based carriers across all sectors, giving them a price advantage. Of course, many of them are working hard to remove specific perception issues.

Over the last one year, with spiralling crude rates, the component of fuel surcharge and taxes in each flight ticket has grown from around 15-20% to over 40%. On the popular India-London sector, the total tax payout in European carriers can vary from Rs 8,500 to Rs 13,500, depending on the airline one chooses. In this fuel surcharge varies between Rs 5,500-Rs 8,350.

For Indian carriers Jet Airways and Air-India fuel surcharge and taxes in the Delhi-London sector hovers around the Rs 9,800-level. In case of Gulf-based carriers such as Qatar Airways, Kuwait Airways and Ethihad, the total tax payout for London varies between Rs 6,800 and Rs 8,000, almost half of what is charged by European carriers.
On the Delhi-New York sector, the average payout for taxes in European carriers is in the region of Rs 16,500, which includes fuel surcharge of around Rs 10,000.

Indias international carrier Air-India charges Rs 14,800, of which Rs 11,000 is the fuel surcharge component. For Gulf-based carriers, the total tax payout can vary between Rs 6,200 (as in case of Kuwait Airlines) to Rs 15,000, depending on the airline.

For those flying to east coast of USA (for instance, Los Angeles), taxes can vary between Rs 12,000 in Thai Airways and can go up to Rs 17,500 as in case of Singapore Airlines. However, the interplay of taxes with market forces is most well-played out in case of travel to southeast Asian destinations such as Singapore and Bangkok.

A Delhi to Singapore return economy ticket will attract total tax payout of Rs 7,200 in Singapore Airlines. Jet Airways for the same destination charges around Rs 7,000 as fuel surcharge and taxes. In case of Air-India, the figure comes down to Rs 5,300. However, Air Sahara takes the cake by charging just Rs 4,500 as fuel surcharge and taxes.

Travel agents concede that airlines use the tax component to hardsell their offerings. Some airlines such as American Airlines and Emirates have started giving special incentives to travel agents, giving them a cut out of fuel surcharge to promote themselves. India is price sensitive market and airlines and agents play around with taxes while keeping base ticket fares low to attract attention, points out Balbir Mayal, former president of TAAI.

So before you fall for the attractive fares offered by airlines, do check out the tax outgo if you want some extra dough for shopping.

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