More than two years after it started regulating air ticket prices, the government has decided to remove this practice from 31 August 2022. The move, which comes in the middle of a lean traffic season, is likely to unleash fare war which would lead to lowering of ticket prices, airline executives and industry experts said, as per an ET report.
For the uninitiated, the Union Aviation Ministry had imposed lower and upper limits on domestic airfares based on flight durations when services resumed after lockdown in 2020.
"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.
Yesterday, 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."
The airlines and airport operators must, however, ensure that the guidelines to contain the spread of COVID-19 are strictly adhered to and COVID-appropriate behaviour is strictly enforced by them during travel, it added.
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The ministry had imposed lower and upper limits on domestic airfares based on flight durations when services were resumed on May 25, 2020 after a two-month lockdown due to the COVID-19 pandemic.
For example, airlines currently cannot charge a passenger less than Rs 2,900 (excluding GST) and more than Rs 8,800 (excluding GST) for domestic flights of less than 40 minutes.
The lower caps were there to protect the financially weaker airlines and the upper caps to protect passengers from high fares, as per reports. Now, it remains to be seen whether the expected price war amongst airlines after govt control gets removed from 31 August leads to a drop in flight ticket prices or not, and if yes, to what extent.
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