Nepalmountainnews Report | 15 May 2008
Airline operators have warned the government that they will raise the airfare if the latter does not withdraw its decision of hiking air turbine fuel (ATF) prices at the earliest.
Stating that there is no logic for such an immediate increase in the fuel price hike at the moment, the operators asked for the immediate roll back of the government decision. 
Airlines Operators Association of Nepal (AOAN), the representative organization of Nepali airline companies, has also strongly condemned the government run oil monopolist- Nepal Oil Corporation's (NOC) - for its move to hike ATF prices.
"NOC has always been raising ATF prices without considering its economic implications to airline industry and air passengers," said AOAN president Bijaya Shrestha, adding that the hike is completely illogical, as NOC has a good profit margin in sales of the aviation fuel.
Yesterday, NOC suddenly hiked the ATF prices by Rs 10 per litre or 12.5 per cent for domestic use and $230 per 1000 litre or 21 per cent for international operations. NOC has cited the mounting losses incurred due to huge price disparity and skyrocketing fuel prices globally.
According to Shrestha, additional fuel surcharges following the latest ATF price hike has been already worked out and details have been submitted to Civil Aviation Authority of Nepal (CAAN) for approval. He, however, didn't disclose the details.
"If the government sticks to its decision, the airliners have no alternative than to pass the burden to passengers by increasing the air fare," he said, adding that the government must roll back its decision for the benefit of industry as well as air passengers.
According to NOC it has been incurring a whopping loss of Rs 1.67 billion a month as per the revised price forwarded by its sole supplier — Indian Oil Corporation (IOC) on May 2.
Official at the corporation said that the outstanding dues of NOC has crossed already Rs 13 billion including six billion rupees loans it had taken from the government at various times, Rs 2.15 billion from the commercial banks, Rs 2.50 billion from the Citizen Investment Trust and Employees Provident Fund. The outstanding dues that NOC owes to IOC currently stands at Rs 2.50 billion.
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