Mumbai: Domestic airline companies are gearing up to oppose the civil aviation ministry’s move to impose a cap of Rs 20,000 on economy class fares. According to them, the government should first lower taxes and ease airlines’ cost pressures.
A ministry's internal note proposes caps on minimum and maximum fares airlines can charge, keeping in mind their cost structure, profit margin and ensuring the last minute fares are not out of bounds of passengers. The proposal has not been formally discussed with the carriers.
However, the Air Passengers Association of India has welcomed the idea of a price cap on the ground it will prevent unreasonable pricing.
Airline sources also point out for most part of the year, even the highest-priced tickets are below Rs 20,000. Another executive said most of the time, the highest fares were between Rs 11,000 and 13,000. It was only during festive seasons when fares moved upwards of Rs 20,000.
25/12/14 Aneesh Phadnis/Business Standard
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A ministry's internal note proposes caps on minimum and maximum fares airlines can charge, keeping in mind their cost structure, profit margin and ensuring the last minute fares are not out of bounds of passengers. The proposal has not been formally discussed with the carriers.
However, the Air Passengers Association of India has welcomed the idea of a price cap on the ground it will prevent unreasonable pricing.
Airline sources also point out for most part of the year, even the highest-priced tickets are below Rs 20,000. Another executive said most of the time, the highest fares were between Rs 11,000 and 13,000. It was only during festive seasons when fares moved upwards of Rs 20,000.
25/12/14 Aneesh Phadnis/Business Standard
