Sunday, May 30, 2021

Domestic Airfares to Increase From June

Starting June 1, all airlines will operate at only 50 per cent of their total seat capacity instead of the earlier ceiling of 80 per cent. Alongside that, there will be an increase in the lower limit on domestic airfares.

This was announced by the Civil Aviation Ministry on May 28, who said that the decision to decrease occupancy rates was taken "in view of the sudden surge in the number of active COVID-19 cases across the country, decrease in passenger traffic and passenger load factor."

On May 25 last year, the government had resumed scheduled domestic flights in India after a two-month break. At that time, carriers could not operate at more than 33 per cent of their pre-COVID domestic capacity. By December 2020, the ministry had permitted a gradual increase of seat limits to up to 80 per cent. 

Due to multiple state lockdowns, domestic air travel has gone down in the last couple of weeks. Around 3.13 lakh domestic air passengers travelled on February 28, and only 39,000 on May 25. The reduced seating capacity and higher airfares will be a relief for airlines as they have been facing massive losses. 

The lower limit for flights under 40 minutes of duration will be increased by 13%, from Rs2,300 to Rs2,600. Flights between 40 and 60 minutes will have a lower limit of Rs3,300 instead of Rs2,900.

From June 1 onwards, domestic flights of duration between 60-90, 90-120, 120-150, 150-180 and 180-210 minutes will have lower limits of Rs4,000, Rs4,700, Rs6,100, Rs7,400, and Rs8,700, respectively.

Currently, domestic flights of duration between 60-90, 90-120, 120-150, 150-180 and 180-210 minutes have lower limits of Rs3,500, Rs4,100, Rs5,300, Rs6,400 and Rs7,600, respectively.

Last year on May 25, India had imposed lower and upper limits on airfares based on flight duration when services were recommenced after a two-month lockdown.

29/05/21 Outlook

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