Government of India has yet again hiked the airfare on the domestic routes by altering the fare band set initially during the lockdown. This is the third such hike within a couple of months period. In its latest alteration, government has hiked the minimum fare band by 15 percent. In February, govt increased the limit on the minimum and maximum price band by 10% and 30% respectively, followed by another hike of 5 percent in March.
The price capping was put on domestic flight operators to keep the ticket prices in check due to the limited number of flights. The price capping was put in place on May 25 when domestic flights were restarted in a calibrated manner.
Centre had earlier extended the validity period of current airfare cap as well as the capacity utilisation of airlines till May 31. With the validity nearing its end, the new airfare will be applicable from June 1 and will be valid till July 31.
Under the fare structure, air routes are divided into sections based on travel time. Each section has its minimum and maximum fare. Domestic flights with less than 40-minute duration to have lower and upper limits of Rs 2,600 and Rs 7,800, for 40-60 minutes Rs 3,300 and Rs 9,800, for 60-90 minutes Rs 4,000 and Rs 11,700, for 90-120 minutes Rs 4,700 and Rs 13,000, for 120-150 minutes Rs 6,100 and Rs 16,900, for 150-180 minutes Rs 7,400 and Rs 20,400 and for 180-210 minutes Rs 8,700 and Rs 24,200.
As per the previous hike, the upper price band on 180-210 minute flight which was earlier capped at Rs 18,600 was increased by 30% to Rs 24,200, an increase of Rs 5,600. Now as per the new hike, the lower price band is increased 15 percent over the previous hike.
Emphasising that capping of airfares was an “extraordinary measure", Union Minister Hardeep Singh Puri earlier said the price bands are expected to be done away with once flight services reach pre-COVID-19 levels. Replying to questions in the Rajya Sabha, the minister said the civil aviation sector was completely closed down on March 23, 2020, and was reopened on May 25 in a slow and calibrated manner by putting in place SOPs, provisions for seamless contactless travel and a large number of other measures.
“Our effort…is always to open up a little ahead of the actual and potential traffic," the civil aviation minister said. On why are flights not operating up to 80 per cent capacity, the civil aviation minister said that is a decision taken on commercial basis by air carriers.
“We are now confronted with an interesting situation. On the one hand, some of the carriers want us to open full capacity, 100 per cent, whereas others would like to go slow," he said, and added the decision to raise beyond 80 per cent capacity will depend on the behaviour of the virus and “our sense" of comfort that air travel has all the SOPs. Puri further said the floor and the ceiling price on airfares was an extraordinary measure which was necessitated by an extraordinary situation.
It was designed to ensure that airlines, in a situation of limited availability, did not charge exorbitant price, he said. “It is not our intention-it also cannot be in an open, deregulated market situation-to have the fare bands made a permanent feature. So, it is our expectation that when flights open up to pre-COVID levels in this summer schedule, we would not have the need for a price band," the minister said.
He also said the government does not determine the prices sought by the air carrier as it is a deregulated sector. Due to the outbreak of COVID 19, scheduled domestic operations were suspended from March 25, 2020 which were subsequently resumed in a calibrated manner from May 25, 2020 with fare capping (lower and upper limit) to ensure that airlines do not charge excessive fare and the journey is performed only for essential purpose. The order for capping of fare is valid up to July 31, 2021.The domestic scheduled operations at present have been opened up to 80 per cent of the Summer Schedule 2020.
Puri also informed the House that further opening up of the domestic scheduled operations and relaxation in fare capping is subject to prevailing COVID-19 situation, status of operations and passenger demand for air travel.
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