Airfare War Likely In Indian Sky After Government Decides To Deregulate Airfare

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Airfare War Likely In Indian Sky After Government Decides To Deregulate Airfare

Airfare Cap Removed: When the Corona epidemic knocked in the country and the lockdown was imposed, domestic and international flights also stopped. When flight services started from 25 May 2020, the government decided to regulate air fares. The government started fixing the upper and lower limits of fares for domestic flights. However, in the last two years, as the effect of Corona decreased and the number of passengers continued to increase, the government has also reviewed the airfares limit. But now the government has decided that it will not fix the airfare limit, but from August 31, 2022, the airlines themselves will decide the airfare.

Airlines upset due to expensive ATF
There are two aspects to this decision of the government. First, it is believed that airlines will now decide the airfare, in which case the airfare can be expensive. Because air fuel prices have doubled since the government decided to regulate airfare two years ago. 60 percent of the expenditure of any airline is on air fuel. In such a situation, airlines can put the burden of expensive ATF on the passengers.

Increased competition in the aviation sector
On the other hand, two new airlines have come in the Indian aviation sector. Rakesh Jhunjhunwala-backed Akasa Air’s flight has started from August 7, 2022. So soon once again Jet Airvet with new promoters is going to start its flight. Obviously competition is going to start in the Indian aviation sector. In such a situation, it is believed that to woo passengers, airlines can drastically reduce airfares, which was not possible yet because the government used to fix the upper and lower levels of fares.

government’s argument
Civil Aviation Minister Jyotiraditya Scindia said that the decision to remove the cap on airfare of domestic flight has been taken after reviewing the air fuel prices and the same daily demand. Stability has come in the sector and we expect to see tremendous growth in domestic air traffic.

Air travel will be cheaper!
But at present, there is an effect of monsoon across the country. The number of air passengers decreases in these seasons. In such a situation, it is believed that the airlines can reduce the airfares till September to woo the passengers. The festive season will begin with Dussehra from October. Then after the increase in demand, the airfares will start increasing.

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