Airline brings in new ‘peak surcharge’ for busy travel days

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November 12, 2013

MUMBAI: Emirates, the Dubai-based airline, has brought a new fee to India that targets passengers flying out of the country during peak travel days. Called the "peak surcharge," it will be levied on flights departing from India to the US and Europe in the first two weeks of January.

November 12, 2013

MUMBAI: Emirates, the Dubai-based airline, has brought a new fee to India that targets passengers flying out of the country during peak travel days. Called the "peak surcharge," it will be levied on flights departing from India to the US and Europe in the first two weeks of January.

The airline would levy a surcharge of Rs 3,500 on its economy and Rs 4,500 on premium class tickets for flights departing from India between January 2 and 15, said an industry source. The fare will not be applicable for Emirates passengers whose journeys terminate in Dubai. It will be for those who transit through Dubai to go to the US and Europe. Also, the surcharge is not applicable on fares on Emirates flights coming into India.

Unlike fuel surcharge, levied on all flights, peak surcharge is charged only on flights departing on days when the demand for travel is high. That is also the reason why it is difficult to track. "Even travel agents would not be able to tell for sure whether this levy was charged last year too by Emirates or any other airline," said a travel agent requesting anonymity.

Passengers, who have already booked themselves on Emirates flights departing on these days, will not have to pay the peak surcharge. But those booking from Monday will have to pay. Emirates did not comment on the development.

Like most airline fees, peak surcharge was first levied in the US by some domestic airlines during the 2009 Christmas peak season travel. It was a levy of $10. In 2010, American, Continental, Delta, United and US Airways introduced peak surcharge of $10 to $30 on domestic air tickets for certain flights that departed between June 10 and August 22. Later in the year, it was levied on certain days in November and December (to cover Thanksgiving and Christmas). The experiment apparently was not much of a success as the next year, in 2011, the number of days peak surcharge was levied on was cut down by half.

Sudhakara Reddy of Air Passengers Association of India criticized the new levy. "One by one, other airlines will follow, it is a cartel," he said. "Why should passengers who book their tickets early not get cheap fares and be burdened by such new fees?" he asked. Amber Dubey, partner at global consultancy firm KPMG, attributed the development to the typical demand-supply cycles. During peak travel season, the rise in demand leads to a hike in fares. "With the introduction of peak surcharge, airlines can raise the ticket price without touching the base fare," Dubey said. Airline discount coupons, reward tickets and other such incentives are often given on the base fare and not on surcharges and taxes. It is therefore beneficial for airlines to keep base fare low, Dubey added.


Courtesy: PTI