Tuesday, February 02, 2016

'Competition has kept air fare down; should not discourage it': Aviation minister

Putting "floors and caps" on airfares will push the ticket prices higher as competition among airlines has kept the fares lower, Union Minister Ashok Gajapathi Raju said on Tuesday. The Civil Aviation Minister's remarks assume significance against the backdrop of concerns in certain quarters that at times airlines are charging exorbitant prices for tickets.

Last year, there were demands from various quarters, including Parliamentarians, to put in a mechanism to contain steep fluctuations in airfares.
"Competition has kept the prices down and we should not discourage that. In our analysis, if we take a year of ticketing, 1.7% of the ticketing (air tickets) were priced high. So if you go into floors and caps, we will be pushing up the cost of tickets to about 98% and bringing it down for the rest. I don't think that is how policy is formulated. We would like to keep it (ticket prices) down and things to be passed on (to passengers)," Raju said here.
02/02/16 Daily News & Analysis
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