The government has decided to remove the price caps on domestic airfares from tomorrow, August 31. With this move, airlines will now have better flexibility on regulating their fares for the passengers. After almost 2 years the limits imposed shall be removed. Earlier in this month, the Union Aviation Ministry issued a statement, “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 31.08.2022.”
From tomorrow, airlines will be able to offer discounts on flight fares to lure passengers at their own discretion. Earlier, the lower and upper price cap had restricted the companies to put out any sort of offers to attract travellers. Hence, keep a look out as flight tickets might get cheaper soon.
WHY ARE PRICE CAPS BEING REMOVED?
“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 had tweeted.
ATF prices have been coming down during majorly due to the ongoing Russia-Ukraine war that began on February 24 this year.
The govt had imposed lower and upper limits on domestic airfares in May 2020 as air travel resumed after the nationwide Covid-19 lockdown. While the government allowed 100 per cent capacity deployment in October 2021, it continued with the pricing regulation. The lower caps were there to protect the financially weaker airlines and the upper caps to protect passengers from high fares.