Travelling by Air May Cost More as Airfares Likely to Go Up

Travelling by air is soon going to cost more as airfares are likely to go up. As per the report, airfare increase is expected soon in India which will increase the price of air tickets. It has been reported that the government is expected to increase the passenger services fee (PSF) by at least 38 per cent. The increase is aimed at meeting the cost of security at airports in India.

Travelling by air may cost more as airfares likely to go up

It was reported that earlier the government had plans to transfer the cost to the consolidated fund of India (CFI) in order to increase the PSF. But as the finance ministry declined to fund the deficit, the government will now have to increase the airfare to meet the requirements of increasing the PSF.

As per the report, the approximate raise per ticket could be in the range of Rs 50. This increase is expected to bridge the annual fund gap as well as the deficit accumulated over the years. Currently, the passenger service fee (PSF) of Rs 130 is charged on every ticket booked. The fund that is accumulated from the levy is utilized to fund the security cost at the airports in India. Primarily, this fund is used to pay the salaries of the Central Industrial Security Force (CISF) personnel manning the airports.

Finance Ministry refused to fund any deficit

As per the report, the aviation ministry believed that an increase in air ticket prices would directly affect the passenger. Rather burdening the passengers the aviation ministry wanted the finance ministry to finance the deficit directly. In a way the aviation ministry wanted the cost of security at airports to be shifted to the consolidated fund of India (CFI). The finance ministry has refused to fund any deficit which means the aviation ministry will have to bear the burden by increasing the prices of the tickets.

How much fund is required?

It has been reported that currently, the cost to provide security at the airports in India costs over Rs 1,300 crore. The fund collected through PSF (passenger service fee) to provide security at the airports across India falls short by approximately Rs 500 crore. To meet the cost of security at airports across the country, the aviation ministry is of the view to increase the PSF.

Source: Economic Times