Iran News ...


01/09/12

Fall of Iran's Currency Strains Airline Budgets

Source: Radio Zamaneh

Kish Air has announced that Iranian airlines are faced with cost increases of 30 to 35 percent due to the rial's falling value relative to foreign currencies.

The Mehr News Agency reports that Saeed Bahari, the head of Kish Air, said today that despite the rial's fall against the dollar, airfares have not been increased.

He added that air safety could be at risk "because there is no coordination between expenses and the income of the airline companies."

The rial has been in a steep fall against foreign currencies in recent weeks. Iranian airlines have called on the Central Bank to give them a fixed quota of foreign currency, but so far the bank has said no.

The airlines have also been grappling with the rise in fuel costs since last year, when the government cut subsidies for energy and food staples.

Bahari said, however, that once the second phase of subsidy restructuring is implemented, airlines will be allowed to increase fares in proportion to costs.

The Minister of Transportation has estimated that a 17-percent increase would allow airlines to continue offering adequate service.

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