Monday, May 03, 2021

India's airlines have another problem to deal with - cap on domestic ticket rates

Dubai: Apart from COVID-19 cases surging, India’s airlines have another problem to contend with – the cap on ticket rates.

The country’s aviation regulator has extended the capping of fares on all domestic flights until May 31 and limited capacity at 80 per cent of pre-pandemic levels. With the current regulations in place, airlines cannot charge beyond 10,500 rupees at the top end or less than 3,500 rupees at the lower.

This has been done to protect the customer as well as the airline. “The moment the government lifts the cap on fares, there are airlines who may charge 30,000-50,000 rupees for a one-way ticket,” said an industry source.

“Everybody was hoping that there would be an opening up of the market - and we were almost there.”

The government has also limited the number of flights that airlines can operate within the country. “The perennial challenge ever since the pandemic happened is that the Indian government has always looked at how to regulate the supply side,” said an industry source. “But neither the government nor aviation industry bodies have looked at the demand side.

"Everybody's been working in silos… and that’s because everybody's busy addressing the procedures regulated by the government.”

India’s aviation sector – including travel agents - is pushing for more government aid through the Confederation of Indian Industry (CII) and Associated Chambers of Commerce of India, among other industry forums.

“All of them have given their inputs and the government is aware of it,” said the source. “The government will have to look into it whenever they have the resources to do so.”

03/05/21 John Benny/Gulf News

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