Government hikes air fare cap; passenger capacity at 72 per cent

'The minimum and maximum fare chargeable shall continue to be rolled over for the 30 days cycle,' the ministry said in the statement.

Published: 14th August 2021 10:28 AM  |   Last Updated: 14th August 2021 10:28 AM   |  A+A-

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For representational purpose. (Photo | PTI)

By Express News Service

NEW DELHI:  The ministry of civil aviation (MoCA) has increased the capacity deployment by allowing airlines to sell up to 72.5% seats of their pre-covid-19 capacity on domestic flights, up from 65% earlier. The ministry also announced a price hike on domestic flights by at least 12.5% on both minimum and maximum domestic airfare.

“The minimum and maximum fare chargeable shall continue to be rolled over for the 30 days cycle,” the ministry said in the statement. According to the new changes, the minimum fares have been raised to Rs 2,900 from Rs 2,600 for short-haul flights with a duration of less than 40 minutes. The maximum fare that an airline can charge in these routes has been increased to Rs 8,800 from Rs 7,800. There are six other bands with separate minimum or maximum fares.

With this price hike, the Delhi- Mumbai one-way minimum fare has increased by at least Rs 575, while the maximum airfare has gone up by Rs 1,625. India airlines have long been asking the government to remove fare and capacity caps stating that it may result in additional losses. The government, however, is taking the measure to maintain social distancing norms inside airlines amidst Covid-19 pandemic and also protect the interest of smaller airlines which could not fight a tariff war against the big players.

MoCA permitted increasing the capacity deployment on domestic routes gradually from 33%, with effect from May 25, 2020, to 80%, with effect from December 03, 2020. However, it reduced the permissible capacity deployment to 50% of pre- Covid levels with effect from June 01, 2021 due to the resurgence of the second wave of the pandemic. Before the current announcement, it was fixed at 65%. “This increase will allow airlines to partly offset the impact of increased aviation turbine fuel prices, thereby cushioning some impact on their losses.

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