New Delhi: Domestic airfares have been rising rapidly since August due to a pickup in demand ahead of the festive season, and the government’s move to increase fare caps. There are chances that higher fares could weaken the demand outlook in the sector.
The government caps were put in place during the peak of the pandemic, but fares have gradually increased as the pandemic situation improved. Such caps on airfares are applicable for flights undertaken within 30 days of booking.
At present, domestic carriers are currently allowed to sell up to 72.5 per cent of available seats on an aircraft.
Bigger airlines have requested the government to remove caps on aircraft passenger capacities as they are hindering the revival of the sector, reported livemint.com. However, weaker airlines are against the removal of caps as the move will enable bigger airlines to lower fares and grab greater market share.
The government had raised the minimum fares for domestic flights of less than 40 minutes to Rs 2,900 from Rs 2,600. Meanwhile, the maximum fares for flights less than 40 minutes have been increased to Rs 8,800 from Rs 7,800.
In case of longer duration flights — 180-210 minutes — the minimum fare was raised to Rs 9,800 from Rs 8,700. On the other hand, the fare for the maximum duration has been increased to Rs 27,200 from Rs 24,200.
15/09/21 India Today
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