Government rules out capping airfares

The government has ruled out the possibility of capping airfares during the ongoing peak travel season amidst complaints of exorbitant ticket prices on certain sectors.

The government has ruled out the possibility of capping airfares during the ongoing peak travel season amidst complaints of exorbitant ticket prices on certain sectors.

“In a deregulated environment, introducing fare caps on various sectors will lead to market distortion. The benefits of market competition will not be available to passengers at large,” said an official of the Ministry of Civil Aviation.

The official added that since the meeting held last week with various airlines where they were told to keep a strict watch over airfares and develop a mechanism to control the fares in the highest bucket (typically sold closer the date of departure or as the aircraft nears full capacity), prices had seen a decline of 15%-60%.

During COVID-19, the government prescribed a fare range for flights in order to protect airlines as well as passengers.

While high airfares post-COVID-19 are not just restricted to India but are a global phenomenon due to a variety of reasons such as pent-up travel demand, rise in fuel prices, supply chain issues resulting in delay in delivery of spares and engines, according to a report by the Airports Council International (ACI Asia-Pacific) airfares in India (41%) saw the highest surge in the Asia Pacific region followed by the UAE (34%), Singapore (30%) and Australia (23%). GoFirst’s suspension of flights resulting in the removal of up to 54 aircraft has also made matters worse.

“These excessive airfares threaten the industry’s long-term recovery and may have a far-reaching influence on the associated industry by reducing demand for air travel and increasing the financial burden on the already stressed sector. Airlines should exercise fair pricing that supports recovery and safeguards consumers’ interests,” said Director General of ACI Asia-Pacific Stefano Baronci while urging for liberalisation of market through policies such as Open Skies.