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Iran's parliament gives Roads and Transportation Ministry 48-hour to draft plan on air fare

Tehran, Jan 6, IRNA -- Majlis on Monday welcomed Roads and Transportation Ministry's request for a 48-hour deadline to draft a plan on hike in air fares on the domestic route.

An MP from Gonabad (Khorassan province) and Head of the Development Commission's aviation committee at Majlis Azadi Azadmanesh told IRNA that Minister of Roads and Transportation Ahmad Khorram had been asked to specify the impacts of air fare hikes.

Azadmanesh said the Ministry's plan would be scrutinized at Majlis.

Roads and Transportation Ministry said that lower subsidies for plane fuel, increase in prices of foreign-made parts and equipment, and rising wages had prompted drafting of the plan.

Air fares increased by 35 percent to rls 180,000 on Sunday, triggering reactions by the public and Majlis.

Majlis Development Commission on Saturday called on the Civil Aviation Organization and its affiliated organs to withhold any hike in plane fares until a clear plan has been formulated and presented to the legislature.

A directive from the High Council of Aviation proposed fares increases up to rls 180,000 per seat-hour (excluding miscellaneous fees) to take effect beginning Saturday on all domestic flights.

The Head of Majlis Development Commission for Aviation Affairs Azadi Azadmanesh said until detailed plans for proposed revenues and the manner for upgrading flight and airport-related services rendered to passengers have been specified, any hike in plane fares should be put on hold.

Although air fares are not bound by the 10 percent limit on price of goods and services, 'the proposed hikes of 35 to 50 percent have created concerns among the MPs and the public at large'.

He further cautioned about the inflationary impacts that such a drastic increase in air fares may have on the prices of comparable transportation services and inflation rate.

Managing Director of Iran's national carrier, Iran Air, Davoud Keshavarzian said here Tuesday that sanctions on airplane purchases, price stability and economic system are the most important impediments facing civil aviation in Iran.

"Sanctions prevent Iran from purchasing aircraft, even if only 10 percent of the parts are US-made," he told IRNA.

On the rise in domestic flight fares, he said transportation fares are determined according to cabinet directives and implemented by the Road and Transport Ministry.

Keshavarzian said the Economic Council has approved a 21 percent increase in transportation rates and a Majlis oversight commission has also confirmed it.

Following the liberalization of foreign exchange rates, the airlines have been calling for increase in plane ticket prices, 'which was finally approved by the Road and Transport Ministry'.

Alluding to the air fares in the previous years, he said three years ago when the rial/dollar exchange rate stood at rls 3,000 and fuel prices at rls 350, 'the Economic Council set rls 11,800 or dlrs 33 for one-hour of domestic flight'.

Before the cabinet directive, the one-hour rate for domestic air flights equalled rls 135,000 or less than dlrs 18 and 'now the new rate is rls 203,000 or dlrs 25.5'.

Keshavarzian further said instances where the passengers are entitled to financial damage due to flight delays, have to be explicitly mentioned on tickets, 'otherwise the airlines have no liability to reimburse fares or pay financial damage to passengers'.

... Payvand News - 1/7/03 ... --

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