New Delhi: It won’t be feasible for the government to cap airfares round the year across the country, admitted Union Aviation minister Ram Mohan Naidu.
The minister said in Lok Sabha on Friday that a deregulated market ultimately benefits consumers and that ticket prices typically rise during the festive season.
“Airfares usually rise during the festive season because of increased demand on specific routes and at particular times. These fluctuations are seasonal, and it is not feasible to cap fares for an entire year on any given sector. Market demand and supply naturally regulate airfares on their own,” the minister said.
Naidu was responding to a private member’s bill which seeks regulation of airfares amid the unprecedented IndiGo crisis, which sent ticket prices soaring.
“The idea behind deregulation when it was introduced was to allow the sector to grow.. If we want the civil aviation sector to grow, the foremost requirement is to keep it deregulated so that more players can enter the market,” Naidu stated.
“All countries that have seen exceptional growth had deregulated markets. It encourages more players to enter and opens up greater cooperation. You allow market dynamics to function, letting demand and supply play their natural roles. Ultimately, the passenger benefits the most,” the minister argued.
Naidu clarified that deregulated market does not mean a free hand for the companies as the government has sufficient powers to intervene when necessary.
“Even though the market is deregulated, the Aircraft Act in its current form gives the central government the authority, in extraordinary circumstances where there is a possibility of misuse, to intervene and set things right. This includes capping fares to ensure that passengers are not subjected to opportunistic pricing,” Naidu said.
Naidu took the example of the COVID crisis, Mahakumbh, Pahalgam terror attack and recent IndiGo crisis to make the point that the government exercised its powers to intervene when demand was unusually high.
