Caps on airfares that started post lockdown in May 2020 were raised by the Ministry of Civil Aviation through a government order on Thursday allowing airlines to charge 10-30% more for domestic flights with immediate effect.
The government has imposed a minimum and maximum limit on airfares that airlines can charge from passengers. This fare cap order is effective until March 31, 2021. Aviation regulator, the Directorate General of Civil Aviation (DGCA) has increased minimum airfares on all seven sectors by 10-12 percent and has raised the limit on maximum fare by around 30 percent, as per the government order, CNBC18 said. The seven sectors have been classified on the basis of approximate duration of flight.
Airfares: Based on Flight Duration
- Category A is for those two points whose flight duration time is less than 40 minutes such as Agartala-Guwahati, Amritsar-Srinagar, Bengaluru-Chennai, Bhopal-Mumbai, among others.
- Category B is for those two points whose flight time duration is between 40 and 60 minutes such as Ahmedabad-Bhopal, Amritsar-Delhi, Bengaluru-Goa among others.
- Category C is for those two points whose flight time duration is between 60 and 90 minutes such as Ahmedabad-Chandigarh, Bengaluru-Kolkata, Bhopal-Hyderabad, Bhubaneshwar-Chennai among others.
- Category D is for those two points whose flight time duration is between 90 and 120 minutes such as Varanasi-Jaipur, Ahmedabad-Kolkata, Bengaluru-Bhopal, Delhi-Bhubaneshwar among others.
- Category E is for those two points whose flight time duration is between 120 and 150 minutes such as Agartala-Delhi, Bengaluru-Jaipur, Chandigarh-Hyderabad, Chennai-Lucknow among others.
- Category F is for those two points whose flight time duration is between 150 and 180 minutes such as Ahmedabad-Guwahati, Bengaluru-Chandigarh, Chennai-Guwahati, Delhi-Kochi among others.
- Category G is for those two points whose flight time duration is between 180 and 210 minutes for routes such as Coimbatore-Delhi, Delhi-Thiruvananthapuram, and Port Blair-Delhi.
Earlier in the day, replying to questions in the Rajya Sabha, Civil Aviation Minister, Hardeep Singh Puri said the civil aviation sector was completely closed down between March 23 and May 25, 2020. It resumed in a slow and calibrated manner, with MoCA putting in place SOPs, provisions for seamless contactless travel and a large number of other measures.
“We are now confronted with an interesting situation. On the one hand, some of the carriers want us to open full capacity, 100 per cent, whereas others would like to go slow,” he said, and added the decision to raise beyond 80 per cent capacity will depend on the behaviour of the virus and “our sense” of comfort that air travel has all the SOPs,” The Economic Times reported the Minister as saying.
Mr. Puri further said the floor and the ceiling price on airfares was an extraordinary measure which was necessitated by an extraordinary situation. ‘It was designed to ensure that airlines, in a situation of limited availability, did not charge exorbitant price,” he said.
The Minister added that it is not our intention — it also cannot be in an open, deregulated market situation–to have the fare bands made a permanent feature. “So, it is our expectation that when flights open up to pre-COVID levels in this summer schedule, we would not have the need for a price band,” the minister said.
He also informed the House that when the flights were opened up in May, there were only 30,000 passengers. However, the figures for Monday are about 2,87,000 passengers. “So, the demand is rising and once there is economic and commercial viability, the airlines will not need any encouragement from us to restart the flights,” he added.
Mr. Puri said the government, in an extraordinary situation, can prescribe a price band as in the case of present COVID-19 situation. But once it opens up, the government can encourage airlines to either not charge airfares at rock bottom prices or charge exorbitant prices on airfares. He also said the government does not determine the prices sought by the air carrier as it is a deregulated sector.