Can't Cap Airfares For Entire Year, Aviation Minister Tells Parliament

Civil Aviation Minister K Ram Mohan Naidu told the Lok Sabha today that the government cannot impose fare caps for an entire year, citing seasonal fluctuations in demand and operational realities of the aviation sector. 

His remarks came amid widespread concern over expensive air tickets during major festivals and as the country's largest airline, IndiGo, faces a mandated reduction in its flight schedule following significant operational disruptions.

Naidu said airfares traditionally rise during periods of high demand and that it would not be viable for the ministry to enforce an annual cap.

"We cannot cap airfares for the entire year," the minister told Parliament. "During the festive season, demand increases and fares go up. We have asked airlines to increase their capacity during these busy periods."

He added that the ministry has expanded flight routes and brought more flights into the system to ensure passengers have multiple travel options at times when demand spikes.

Naidu outlined steps taken by the government to keep fares "within an adjustable and reasonable range," including instructing carriers to increase seat capacity, add new flights on popular routes, and comply with passenger-protection guidelines.

"Airlines have been advised to augment capacity during peak seasons," he said. "More flights have been introduced, and flight routes have been expanded."

Replying to a debate on a private member's resolution on 'Resolutions: Appropriate Measures to Regulate Airfare in the Country' in the Lok Sabha, the minister also mentioned about non-availability of aircraft and that discussions are on to make planes in India.

The resolution, which was later withdrawn, was moved by Congress member Shafi Parambil.

There are multiple levels in the aviation ecosystem and various aspects, including the viability of airlines, he noted.

Earlier this month, the civil aviation ministry imposed a distance-based cap on domestic airfares in the wake of the IndiGo flight disruptions.

Domestic air ticket pricing remains "on par with other nations" and it would not be feasible for the government to cap airfares across the nation, Naidu said.

According to the minister, a deregulated market ultimately benefits consumers and that ticket prices typically rise during festive seasons.

He also emphasised that deregulation remains central to the growth of civil aviation.

"If we want the civil aviation sector to grow, the first and foremost requirement is to keep it deregulated so that more players can enter the market." However, the minister also said that deregulation does not give the airlines a free hand and the government retains powers to intervene when needed.

Naidu said that state-owned Alliance Air has started a three-month pilot scheme of fixed airfares and after looking into how much it has benefited passengers as well as the feedback, the ministry might also consider a similar plan for private airlines.

Stressing that capping airfares is not a "single-way solution", the minister said that in comparison internationally, the rate of growth in airfares in India has been negative, in relative and real terms.

"There has been a 43 per cent decrease in airfares when you consider the Consumer Price Index (CPI), inflation...," he said and added that airfares are affordable.

However, Naidu did not mention about the time frame for the comparison.

"The government has exclusive powers in extraordinary circumstances when they feel that when airfares are rising above the normal and becoming abnormal, we are taking it up...," Naidu said.

Listing out the bottlenecks, the minister said the main issue is about the availability of aircraft.

Indian carriers have more than 1,700 aircraft on order but global supply chain problems have been delaying the deliveries.

In this context, Naidu mentioned about the efforts to make planes in India.

"This government has taken a stance that we are not going to wait for these aircraft to be built... We are going to create a programme where aircraft can be built in the country. We should have a Made in India aircraft.

"There is Russian Sukhoi SJ-100 which is a regional aircraft. We are talking with them. HAL is engaging with them. They have (signed) MoU (memorandum of understanding). They are going to get technology here so that we can build the plane here," the minister said.

According to Naidu, talks are also happening with Brazilian aircraft maker Embraer.

"We are telling them to come to India and manufacture here," he said.