The commencement of military offensive against Iraq has meant bad news for the civil aviation sector worldwide. Reeling under the fallout of 9/11, this sector had begun to show nascent signs of recovery just recently. But Operation Iraqi Freedom has nipped this comeback in the bud.Barely a week into the campaign and the International Air Transport Association has decided to hike air fare by 5 per cent. This applies to all international airlines across the globe. Further, a $10 charge on each flight coupon is also to be coughed by the traveller.This essentially means that passengers will have to pay $10 on every section of their journey. So for instance, a person flying Delhi-Amsterdam-London will have to pay $10 first for Delhi-Amsterdam and then again for the Amsterdam-London stretch.Officials say this is the minimum that IATA could impose given the rise in the prices of aviation turbine fuel from $25 a barrel to $30 a barrel.International travellers could have had it worse when insurance companies proposed increasing the war and hull insurance costs for aircraft flying through the Gulf region. This would again have to be recovered from passengers and there were fears that the hike could prove to be a major setback for airline companies.Taking this into account, airline companies across the world made representations to London-based re-insurers for a rollback. Thankfully that happened though the re-insurers have added a rider which permits them a reconsideration depending on how the campaign against Iraq unfolds in the days ahead.Despite this, there are certain costs that will have to borne by passengers due to the war in Iraq. Most planes flying in the East-West axis have had to re-route their flight paths to avoid Baghdad and its adjoining airspace. This translates into increase in travel time, fuel expenditure as well as risk. Airline companies have been considering hikes on specific routes to even-out costs.For instance, Air India flights to Europe and the eastern seaboard of the US have to take diversions which involve at least an extra hour of flying time. And with Pakistan airspace not available to Indian carriers, there are few options available to it.Civil Aviation Minister Shahnawaz Hussain has gone on record that Air India could end up suffering losses to the tune of Rs 50 crore if ticket prices were not hiked. The 5 per cent rise is expected to somewhat cushion the impact for the moment. But both A-I and Indian Airlines are clear that in case of increase in insurance costs, the Government will have to come up with a bailout package as the companies simply cannot burden the traveller. The war has, however, not had a direct impact on domestic air travel. Still, Indian Airlines and Jet Airways have gone ahead and announced a 15 per cent across the board hike in air fare. Here again, the reason was a jump in ATF prices which soared from Rs. 22, 380 a kilo litre to Rs. 25, 200 a kilo litre in the domestic market. In fact, from being below Rs. 20,000 a kilo litre in June last year to the present price, domestic carriers feel they were left with hardly any choice.The main reason, airline officials say, for imposing the hike is the high sales tax levied by Indian states on ATF. From rates as low as 4 per cent in Andhra Pradesh to 33 per cent in Kerala, domestic carriers have been pitching for uniformity in the sales tax structure. This, however, has not materialised despite attempts by airline companies to individually negotiate with states levying higher sales tax on ATF.For the moment there is no respite for the air traveller and airline companies, both of whom are affected adversely by current business trends. The only hope for international carriers, at least, is that the war will not last longer than a few more weeks. The industry might just wear that out but longer than that could hold disastrous consequences for this sector.
