The Narendra Modi government on Wednesday announced that the airfare caps imposed on the domestic airlines will be removed by the end of this month. According to the circular issued by the Union Civil Aviation Ministry, the decision has been taken after 27 months since the price limits came into effect after the hard lockdown of 2020.
This is great news for the flyers. This is because now, the airlines can offer the air tickets at minimum cost without taking into consideration the airfare cap. Aviation Minister Jyotiraditya Scindia took to Twitter to make the official announcement. Talking about the current state of the aviation sector in India, Scindia also mentioned the consistently lower cost of ATF.
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“The decision to remove air fare caps has been taken after careful analysis of daily demand and prices of air turbine fuel (ATF). Stabilization has set in and we are certain that the sector is poised for growth in domestic traffic in the near future,” the Aviation Minister said on Twitter.
ATF prices have been coming down during the last few weeks after jumping to record levels, primarily due to the Russia-Ukraine war that began on February 24.
On August 1, the price of ATF in Delhi was Rs 1.21 lakh per kilo-litre, which was around 14 per cent lower than last month.
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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.
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.” 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 behavior is strictly enforced by them during travel, it added.
(With inputs from PTI)