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Govt all set to lift fare caps imposed on airlines from August 31

New Delhi: The Union Aviation Ministry announced on Wednesday that restrictions on domestic airfare will be lifted on August 31 after a period of around 27 months. “The decision to remove air fare caps has been taken after careful analysis of daily demand and prices of air turbine fuel (ATF). Stabilisation has set in and […]

Edited By : Vikas Kumar | Updated: Aug 10, 2022 17:18 IST
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New Delhi: The Union Aviation Ministry announced on Wednesday that restrictions on domestic airfare will be lifted on August 31 after a period of around 27 months.

“The decision to remove air fare caps has been taken after careful analysis of daily demand and prices of air turbine fuel (ATF). Stabilisation has set in and we are certain that the sector is poised for growth in domestic traffic in the near future,” Aviation Minister Jyotiraditya Scindia said on Twitter.

The Russia-Ukraine war, which started on February 24, has been a major factor in the decline in ATF prices over the past three weeks after they spiked to record heights.

ATF cost Rs. 1.21 lakh per kilolitre on August 1 in Delhi, which is around 14% less than it did the previous month.

After a two-month lockdown due to the COVID-19 pandemic, services resumed on May 25, 2020, with lower and upper limits on domestic airfares dependent on flight durations.

For domestic flights lasting under 40 minutes, for instance, airlines are now prohibited from charging a customer less than Rs 2,900 (excluding GST) and more than Rs 8,800 (excluding GST).

The lower limitations were put in place to safeguard the financially shakier airlines, and the upper caps were intended to safeguard customers from exorbitant prices.

On Wednesday, the Civil Aviation Ministry stated in an order: “After review of the current status of scheduled domestic operations viz-a-viz passenger demand for air travel…it has been decided to remove the fare bands notified from time to time regarding the airfares with effect from August 31, 2022.”

However, the instructions to stop the spread of COVID-19 must be properly followed, and COVID-appropriate behaviour must be strictly enforced by them while travelling, it was stated.

Vinod Kannan, the CEO of Vistara, had stated on June 19 that while he would be pleased if the lower and maximum restrictions on airfares were raised, the best option would be for the airlines to have complete discretion over pricing.

First published on: Aug 10, 2022 05:18 PM IST

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