NEW DELHI: Brace for higher airfares from Monday as the temporary price cap imposed by the government in December, in the wake of the Indigo crisis, is set to expire.
It comes at a time when the airlines have seen a rise in operational expenses on account of the circuitous routes taken by international flights due to the ongoing war in West Asia between US-Israel and Iran. Airlines had recently introduced a fuel surcharge to offset the higher operational expenses due to the rise in price of Aviation Turbine Fuel.
Referring to the Indigo crisis in December, the order said, “The prevailing situation has since stabilised, with restoration of capacity and normalisation of operations across the sector.”
While removing the fare cap, the government has directed airlines to exercise pricing discipline and warned that “excessive or unjustified surge in fares during periods of peak demand or disruptions” could force the government to reintroduce fare caps or make other interventions in the public interest.
“Airlines shall ensure that fares remain reasonable, transparent and commensurate with market conditions, and that passenger interests are not adversely impacted,” it said.
The order also comes in the backdrop of the Federation of Indian Airlines, which represents three major airlines in the country, calling for the rollback of a recent announcement by the ministry mandating that 60% of seats in any flight be allocated free of cost.