The Ministry of Civil aviation reported on Thursday an increase in the minimum and maximum airfare across all bands on the spectrum. The move comes in a bid to relieve the financially distressed airlines especially in the post pandemic economic situation. This move comes as a blow to the passengers who will have to shell out significantly higher for air-travel.
Last may as the Central Government signalled fare restrictions via bands for flights to ensure that dynamic pricing does not affect the consumers. This band was devised in terms of flight duration. The first band consisted of flights less than 40 minutes in duration whose lower limit was increased on Thursday from INR 2,000 to INR 2,200 and the upper limit was set at INR 7,800 from the previous INR 6,000. The next band applies for flight with durations of 40-60 minutes, 60-90 minutes, 90-120 minutes, 120-150 minutes, 150-180 minutes, and 180-210 minutes. The revised upper and lower limit on these are respectively, INR 2500 – INR 9800; INR 3300 – INR 11,700; INR 3900 – INR 13,000; INR 5,000 – INR 16,900; INR 6,100 – INR 20,400; INR 7,200 – INR 24,200.
The ministry further noted that these limits would remain in effect up to 31st March 2021 or until further orders. Apart from this, the government has also quoted that the airlines are allowed to sell only 20% of the tickets under the median fare.
This release was well recieved by the Airlines’ top management as well who welcomed the move but quoted that the government should soon do away with such market regulation. Senior official of a low-cost airline quoted-
There’s enough demand in the market to let it decide the fares now. earlier on these restrictions were necessary but now it does not make much sense. the increase is a relief naturally because we are seeing fuel prices rise and this will allow us to raise base fares as per the new median range.