The Ministry of Civil Aviation has removed price caps on domestic airfares with effect from 31st August 2022. This has been declared after almost 27 months and was earlier implemented when the COVID-19 pandemic hit India.
Now, after the removal of price caps on domestic airfares, all the domestic airlines can set the airfares on domestic routes according to themselves, and now there is no need to regulate air tickets according to the price caps set by the Ministry of Civil Aviation earlier.
Earlier in August, the Aviation Ministry announced that the verdict to remove airfare caps has been taken after a cautious analysis of everyday demand and prices of air turbine fuel (ATF). ATF prices are also decreasing mainly due to the Russia-Ukraine war which began in February.
Jyotiraditya Scindia, Union Aviation Minister tweeted, that “the stabilization has set in and that they are sure that the sector is set for growth in domestic traffic in the near future”.
Why Government implemented Airfare caps?
When air services resumed on 25th May 2020, the Government imposed upper and lower limits on domestic airfares, with the purpose to put airfare in check, based on flight durations. With this initiative, the airlines were not able to charge any passenger less than INR 2,900 (exclusive of GST) and more than INR 8,800 (exclusive of GST) for any domestic flights which are less than 40 minutes.
Wherein, the upper caps were to save the passengers from higher fares, and the lower caps were projected to protect the financially weak airlines.
Will the removal affect the travelers or airfares?
As of now, The airfares are expected to be stable, said, aviation experts. But, it might also occur that airlines gradually lower fares to increase the demand and make a profit, meaning fares can go down in some sectors while the common or popular sectors might see an increase in airfares.
However, now it is very difficult for the airlines to offer discounts due to the airfare caps implemented earlier, travellers might save some money on airfares, which completely depends on where they want to travel.