30-70% discount on airplane tickets. Reading about it, Raj Shah went online to book tickets for a trip to Delhi in month of August. But before he could decide which date to book ticket for, low cost tickets were shown as unavailable. He was disappointed as he was not unable to get tickets at low prices. Do people really get such tickets, he asked me? Are these discount fares genuine? We did a little bit of investigating together and realised that discount was on the base fare and not on the total fare. Taxes constitute more than 50% of the total price of a ticket. The other thing about airline tickets are, airline do not offer all tickets at same price. They offer different types of tickets at different prices,called as bucket pricing, Tickets priced higher are available in greater numbers while number of cheapest tickets is the least. This article talks about the base fare of air lines and other taxes and fees charged by airlines like Fuel Surcharges, User Development Fee, PSF.
Base Fare of Airline
A base fare is the price of airline ticket before fees, taxes, and any surcharges are added. Of the various components that make up the cost of an airline ticket, the base fare and fuel surcharge go to the airline and the other components to the government and the airport operator. Image given below shows fare breakup (from ibibo site) for randomly selected flights from Bangalore to Delhi in Aug 2014). For two airlines Indigo and Spicejet the Fare-breakup shows why Indigo is charging Rs 7,038 and SpiceJet only 2,999.
When a discount is announced, it is usually on the base fare. Say, an airline is offering 30% discount for a Rs. 10,000 ticket from Delhi to Cochin. You may think that the discount is on Rs.10,000. The discount is actually only on the base fare. So, if the base fare is Rs. 2,500, the discount is Rs 750, and the ticket will cost Rs 9,250. Let’s look at the other costs, Fuel surcharge, taxes, User development fees that inflate the price of the ticket.
Fuel Surcharges, User Development Fee, PSF : Fees and charges by AirLines
Over and above base fare are fees, taxes etc. Let’s look at these in detail :
Fuel surcharge, Airlines in India began charging this component on each ticket to account for volatile fuel prices somewhere in 2005-06. Fuel surcharge helps airlines offset part of their operations costs in which fuel bills contribute the most , almost 40 per cent. It is charged globally, majority of airlines including British Airways, Emirates, Qantas and American Airlines include a fuel surcharge in the original price of a ticket. Other airlines, such as Aer Lingus, BMI, Delta Airlines and US Airways, add on a fuel surcharge during the booking process.
The airport charge User Development Fee(UDF) per departing passenger, a charge levied by airport operator on passengers to recover the investment made on the development of the airport. The User Develeopment. Charges vary from Airport to Airport and for domestic arrival and domestic departure and International departure. For example for Bangalore UDF, in Jun 2014,Rs 260 and Rs 1,070 for international passenger and UDF for Ahmedabad is Rs 124 for domestic and Rs 466 for international departure. UDF or User Development Fee at various airports can be found at AirIndia webpage on UDF.
Many airlines charge other fees such as convenience fees or printout charges from passengers
AirIndia Explanation of Taxes, Fees & Charges gives the brief description of various charges.
Bangalore Aviation infogaphic shows the UDF and other charges across Indian airports . Click on image to enlarge
SpiceJet in Apr 2014 became the first Indian airline to do away with separate fuel surcharge, it started showing it as part of base fare.
As an example, take a Delhi-Mumbai fare when fuel surcharge was added on. If base fare charged by an airline was Rs 5,850, fuel surcharge of Rs 2,950 got added on, then fees such as PSF, UDF, taxes were added, taking the total to Rs 10,011. This is almost double the base fare. But with the new pricing that SpiceJet is promising, it will show the base fare of the ticket as Rs 8,800 and then add various levies to arrive at Rs 10,011. So, what this means is flyers can now know how much air travel will ultimately cost even if an airline promises very low base fares but then charges them a bomb in total.
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Do you think these surcharges and fees are justified? Have airlines prices affected the way you look at flying?What is the biggest surcharge you’ve come across?