The aviation ministry is expected to make a decision on whether to keep price bands for domestic flights in place by the end of the month, according to a report in moneycontrol.
“Some airlines have requested for the removal of the lower and upper limits on domestic airfares and if there is no opposition from other airlines, a decision on the removal of the fare caps will be taken by the end of the month,” the report quoted a senior government official as saying..
On June 16, India’s Aviation Turbine Fuel (ATF) prices were raised by a steep 16 per cent taking it to record highs.
Airlines have been feeling the pinch due to higher jet fuel prices as it comprises 30-35 per cent of their running cost.
SpiceJet’s CEO, Ajay Singh stated that the sudden increase in ATF costs, combined with the rupee’s depreciation, has left domestic airlines with little choice but to quickly hike rates.
The civil aviation ministry should consider raising the upper limits on domestic airfares, according to IndiGo CEO Ronojoy Dutta, who stated on June 1 that rising ATF prices had become a significant problem.
The price caps were brought in when services were reinstated on May 25, 2020, following a two-month lockdown due to the COVID-19 pandemic.
The civil aviation ministry put lower and higher limits on internal prices based on flight time to help both the passengers as well as airlines.