NEW DELHI, Sept 28: Indian Airlines, to offset increases in input costs, today announced a fare hike of 11.2 per cent across the board from October one, except for flights to the North-East. The proposal for the fare increase was cleared at the I-A board meeting here today.Sources said the airline management's earlier pleas for a 12.2 per cent increase in fare hikes due to the increase in operation costs had not been cleared.However, chairman and managing director PC Sen wrote to, and later met, Civil Aviation Minister Ananth Kumar and said if fares were not increased the airline's losses would reach unbearable levels.In its presentation to the board, the management said the fare increase that was proposed was restricted to only offsetting increases in input costs, and that the company had scrupulously refrained in the past, as well as the present, to increase fares in order to shore up its bottomline.The I-A said the main increases in input costs were a result of increase in landing and routenavigational fees, increase in costs of maintenance of aircraft due to the depreciation of the rupee and inflation, increases in the cost of passenger amenities due to increases in costs of catering items, increase in wages as a result of statutory directives, increase in hotel rates for crew and increase in aircraft lease charges.The management pointed out that the rate of inflation had risen from four per cent in the past to the present level of eight per cent, the price index was 10.5 per cent higher than what it was last year and there was a depreciation of the rupee by 20 per cent.This had resulted in a number of organisations and companies resorting to increase of fares and tariffs such as the railways, hotels and the postal department.The management also told the board of the large number of measures taken by it to reduce costs, which included a total ban on overtime, freeze on direct recruitment, reduction in engineering expenditure, closing of booking offices, freeze of capital expenditureand review of uneconomical flights.The board members felt that the fare increase should be reduced to the minimum. There were detailed discussions on measures to cut costs and certain suggestions were also made by the members which would be put into action by the management.
