New Delhi, Aug 10: Limits imposed on domestic airfares will be removed from August 31, after a span of approximately 27 months, the Union Aviation Ministry said on Wednesday.
“The decision to remove air fare caps has been taken after careful analysis of daily demand and prices of air turbine fuel (ATF). Stabilisation has set in and we are certain that the sector is poised for growth in domestic traffic in the near future,” Aviation Minister Jyotiraditya Scindia said on Twitter.
Much to the discomfort of Srinagar-origin passengers, this development is likely to result in a shoot up of air fares to and from Srinagar Airport yet again. Air fares in the high-demand Srinagar sector had remained in a comfort zone for many months despite a major hike in air traffic and demand.
Meanwhile, ATF prices have been coming down during the last few weeks after jumping to record levels, primarily due to the Russia-Ukraine war that began on February 24.
On August 1, the price of ATF in Delhi was Rs 1.21 lakh per kilo-litre, which was around 14 per cent lower than last month.
The ministry had imposed lower and upper limits on domestic airfares based on flight durations when services were resumed on May 25, 2020 after a two-month lockdown due to the COVID-19 pandemic.
For example, airlines currently cannot charge a passenger less than Rs 2,900 (excluding GST) and more than Rs 8,800 (excluding GST) for domestic flights of less than 40 minutes.
The lower caps were there to protect the financially weaker airlines and the upper caps to protect passengers from high fares.
On Wednesday, the Civil Aviation Ministry stated in an order: “After review of the current status of scheduled domestic operations viz-a-viz passenger demand for air travel…it has been decided to remove the fare bands notified from time to time regarding the airfares with effect from August 31, 2022.”