Aviation experts have criticised the Civil Aviation Ministry’s decision to extend fare caps on domestic flights till February 2021 and its intention to cap airline capacity to 75 per cent.
The Ministry of Civil Aviation (MoCA) on Thursday announced extension of seven bands capping fares for domestic flights till February 24. Imposed from May 25 when domestic air travel resumed, the fare caps were to end on November 24. The ministry had regulated the fares for flights ranging from 40 minute to 210 minute flights to ensure that market dynamics do not shoot fares through the roof for certain sectors.
When the domestic air travel was allowed to resume from May 25, the ministry had allowed airlines to operate only 33 per cent of normal capacity as per summer schedule for 2020. The average daily passenger traffic then was about 30,000 passengers. This cap was enhanced to 45 per cent with effect from June 26, and further revised to 60 per cent from September 2, 2020.
The daily passenger traffic touched 2.05 lakh passengers on November 1, with more than 3400 daily flight movements, and 3.41 lakh daily footfalls at the airports across the country.
“Ministry of Civil Aviation is monitoring the traffic every day, and it is expected that the traffic would further pick up because of the festival season and as the
passenger traffic increases, the upper cap would be revised to 70-75 per cent of normal capacity in the coming days,” a statement from the ministry said.
The statement immediately triggered an intense debate in aviation circles that continued capping would mean slower recovery of the sector to normalcy, and further delay in reopening of international flights.
Is the capping of capacity and fares justified? Ameya Joshi, founder of aviation network blog Network Thoughts, said: “These are unprecedented times and there has never been a policy framed for such times. In a free market, any such caps are a hindrance and hopefully they would go away with more flights being allowed soon. If the objective is social distancing at airports, then may be a staggered schedule should be proposed so that more flights can be accommodated without a huge capacity barrier.”
Jitender Bhargava, former Executive Director of Air India, and author of The Descent of Air India said: “I have always maintained that MoCA should not be imposing restrictions whether it is with respect to number of flights that can be operated or the fares that can be charged, particularly when it lacks justifiable merit. Airlines know it best as to how much capacity must be deployed because excess capacity will lead to more vacant seats on a flight thus impacting financial health of airlines.
08/11/20 Satish Nandagaonkar/Mumbai Mirror
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