NEW DELHI: Since the beginning of January the cost of aviation turbine fuel has been increased by Rs 38,902 per kilolitre. It cost Rs 1,12,924 per kilolitre at present. The hike in the cost of ATF, which comprises 50 per cent of the cost of running an airline, is one of the factors responsible for airlines requesting for removal of the cap on fares.
"Owing to the constantly rising ATF costs,, and recovery of the Indian Aviation sector, we believe that the Government can stimulate the aviation sector by completely doing away with fare caps. It will be helpful in expediting recovery from the pandemic’s severe effects while making air travel affordable for Indian travellers this summer season. These restrictions were implemented for a valid reason, but now would be a good time to relax them," said a spokesperson of IndiGo.
Besides IndiGo, Vistara too is pushing for the removal of the airfare cap. However, they did not respond to any query on this subject.
Airlines allege that the regulation is a hurdle in the recovery of losses that the airlines have incurred over the past two years.
It is learnt that CEOs of some airlines are scheduling a meeting with government officials to take this further.
Airlines are also saying that they stood by the government during the evacuation of Indian citizens stuck in Ukraine, and had no commercial interest in mind then, so the government must pay heed to their request.
"Amongst the airlines that helped in the evacuation process under Operation Ganga were IndiGo, Air India, Spicejet, GoFirst, AirAsia," civil aviation minister Jyotiraditya Scindia said.
Though the minister has acknowledged the contribution of airlines in the evacuation process, we would have to wait and see whether he gives a nod for removing of the cap on passenger airfares as it would be seen as an anti-populist measure.