Domestic Airfares May Drop As Price Bands Imposed On Airlines Will Be Removed

India will remove the fare caps it imposed on domestic airlines in 2020 during the pandemic on Aug. 31, the country's civil aviation ministry.

India to remove fare caps imposed on airlines from August 31

NEW DELHI:

The price bands imposed on domestic airlines in 2020 during the pandemic will be removed on August 31, the country's civil aviation ministry said on Wednesday, lifting restrictions on ticket prices.

In a rare move, the government regulated fares by imposing a minimum and maximum band based on the flight's duration to prevent ticket prices from spiking due to pent-up demand arising from an easing of restrictions on air travel.

While there is risk airfares could be hiked, airlines are more likely to offer deep discounts on tickets to fill up their flights and encourage more flyers during the current lean period.

Previously, airlines could not offer discounts because of the restrictions in place and with no price-band restrictions to operate within; aviation firms can lower ticket fares and bring in the much-needed funds for cash-strapped companies.

After August 31, airlines can charge whatever they see fit for passengers. Since there are no longer any price caps, aviation firms may offer reduced prices to attract more travellers, as they have been reporting significant losses.

We are certain the sector is poised for growth, said Aviation Minister Jyotiraditya Scindia and added that the decision to remove fare caps was taken after careful analysis of demand and fuel prices.

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