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'Airline baggage rate hike will cripple courier services'

By Our Special Correspondent

NEW DELHI JUNE 18. Courier services in the country may cost 35-40 per cent more if the service providers ultimately decide to carry out their threat about upward revision of their rates in the wake of sudden move by domestic airlines to raise the baggage rates for on-board couriers by nearly 60 per cent.

Agitated over the move, the apex organisation of courier companies made it clear that the members would have no option but to revise their rates in the near future to mitigate the impact of the decision by the airlines. However, they were also considering other options to cut costs to minimise the burden to be passed on to the consumers.

Addressing a press conference here, Tushar Jani, Chairman of the Express Industry Council, said the courier companies would not be able to survive without a revision. For if the courier rates were not increased, the industry would suffer huge losses which would retard its growth, leading to closure of operations.

Seeking a review of the decision taken by the airlines unilaterally and conveyed to them, Mr. Jani said "We have written a letter to the Civil Aviation Ministry but we are yet to get a response. If we do not get any response within the next 10-15 days, then we may be forced to pass on the hike in courier baggage rates to the customers".

Although their costs were up by nearly 30 per cent in the last four years on account of higher outgo on input costs, he said the companies were able to contain any increase in rates till now by increasing volumes and cutting costs.

Major domestic airlines such as Indian Airlines, Jet Airways and Air Sahara have increased the courier baggage rates by about 60 per cent from June 16. This was in addition to the seven per cent increase effected in January this year following the Gulf war which has led to a total increase of 67 per cent in last six months.

The members of the Express Industry Council, who control 80-85 per cent of the total express courier business in the country and about 95 per cent of the overseas business, have said that hike in baggage rates by airlines is unjustified. The decision was faulty and discriminatory, said the former chairman of the council, Sandip Shah, lamenting that it applied only to the courier industry and not the postal services. He asserted that justification by the airlines about increasing losses and rise in aviation turbine fuel price was untenable as loss of traffic due to the introduction of apex fares cannot be passed on to the courier industry and that ATF prices have come down in the last two months. Mr. Shah said the courier industry contributes about Rs. 180 crores annually to the total revenue of the airlines.

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