Friday, January 08, 2021

Now, airlines need to sell 20% seats below midpoint of domestic fare range

New Delhi: Domestic airfares will now remain capped till March 31, 2021, a further extension of over a month from the earlier deadline of February 24. However, airlines will now be required to sell at least 20% seats at fares below the mid point of the minimum and maximum fares.

Domestic fares were capped when these scheduled flights were allowed to resume on May 25, 2020. Airlines were required to sell 40% of seats on a flight below the mid point of fare range.

On Friday, the aviation ministry issued an order extending the caps till March 31 but relaxing the requirement to sell tickets at below mid point significantly. Airlines have been pointing out that jet fuel prices have shot up significantly since the rules were set last May and that fare range should either be raised to factor in the increased operating cost or be done away with.

On June 1, 2020, a kilolitre (1,000 litres) of jet fuel cost Rs 26,860 and 26,456 in Delhi (at T3) and Mumbai, respectively. On January 1, 2021, the prices had shot up to Rs 39,324 and Rs 37,813 (taxes extra) in Delhi and Mumbai, respectively — up by almost 50%. Jet fuel accounts for almost 40% of an airline’s total operating cost.

08/01/21 Saurabh Sinha/Times of India

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