“The decision to remove the upper limit of the air fare was made after a thorough analysis of the daily demand and the price of air turbine fuel (ATF). Stabilization has begun and we are confident that the sector is poised for domestic traffic growth in the near future,” Aviation Minister Jyotiraditya Scindia said on Twitter.
The Russian-Ukrainian war, which began on February 24, has been a major factor in the decline in ATF prices over the past three weeks after reaching record highs.
ATF cost Rs. 1.21 lakh per kilometer on August 1 in Delhi, down about 14% from the previous month.
The decision to remove the air fare cap was made after a thorough analysis of the daily demand and price of air turbine fuel. Stabilization has begun, and we are sure that the sector is preparing for an increase in domestic traffic in the near future. https://t.co/qxinNNxYyu
— Jyotiraditya M. Scindia (@JM_Scindia) August 10, 2022
After a two-month shutdown due to the COVID-19 pandemic, services resumed on May 25, 2020, the lower and upper limits of domestic flight tickets depend on the duration of the flights.
For domestic flights of less than 40 minutes, for example, airlines are now prohibited from charging less than Rs 2,900 (excluding GST) and more than Rs 8,800 (excluding GST).
The lower limits were introduced to protect financially unstable airlines and the upper limits were to protect customers from excessive fares.
The Ministry of Civil Aviation stated in an order on Wednesday: “After reviewing the current status of scheduled domestic flights, i.e. the current state of air transport passenger demand, it was decided to abolish the price bands announced from time to time in connection with air transport. flight tickets from August 31, 2022.”
However, instructions to stop the spread of COVID-19 must be properly followed and COVID-appropriate behavior must be strictly observed during travel, the statement said.
Vinod Kannan, CEO of Vistara, said on June 19 that while he would be happy to see the minimum and maximum limits on airfares raised, the best solution would be for airlines to have full discretion over pricing.