Indian Airlines and Alliance Air on Wednesday announced a 10 per cent hike in air travel on all their domestic sectors with effect from June 21 citing the continuous increase in prices of aviation turbine fuel.

The increased fares will not be applicable to confirmed tickets booked before June 21, an IA spokesman said.

However, any open ticket or a new booking after June 21 will be charged as per the new tariff, he said.

The hike in passenger fares would be across the board which includes apex fare and promotional schemes.

Jet Airways, Air Sahara and Air Deccan have already announced hike in their fares by 10 per cent.

The increase was necessitated due to the spurt in global crude prices that has added Rs 200 crore (Rs 2 billion) to Indian Airlines' fuel cost, more than the budgeted estimate for 2004-05 fiscal.

The ATF price has shot up from Rs 21,530 per kilolitre in March this year to Rs 26,000 this month, IA sources said.

In February this year, the price stood at Rs 23,130 per KL and zoomed to an all-time high of Rs 26,000 per KL this month.

"This has constrained Indian Airlines and its subsidiary, Alliance Air, to increase the domestic fare by 10 per cent. This will also proportionately increase the excess baggage rates which are charged at 1.1 per cent of the economy class," said an Indian Airlines spokesperson, adding that the insurance charge of Rs 250 per ticket will now stand merged with the fare component.

The public sector carrier, which spent Rs 866 crore (Rs 8.86 billion) on ATF in 1999-2000, is estimated to have incurred an expenditure of Rs 1,445 crore (Rs 14.45 billion) in 2004-05, they said, adding that the sales tax impact for IA stood at Rs 245 crore (Rs 2.45 billion) per annum.