Govt Removes COVID Air Fare Caps; Will Airlines Increase Ticket Prices?

Pic courtesy India Narrative

New Delhi: Come August 31, airlines will be free to decide what to charge passengers as the government has ended the limits it had placed on airfares when the pandemic began.

With both upper and lower limits removed, airlines may discount tickets to ensure that the volume of passengers increases.

“The decision to remove air fare caps has been taken after careful analysis of daily demand and prices of air turbine fuel. Stabilisation has set in & we are certain that the sector is poised for growth in domestic traffic in the near future,” tweeted Aviation Minister Jyotiraditya Scindia.

Notably, the government had regulated fares by imposing a minimum and maximum band based on the flight’s duration to prevent ticket prices from spiking due to pent-up demand arising from an easing of restrictions on air travel.

The aviation industry was one of the worst hit during the pandemic with airlines reporting large losses.