India will remove the fare caps it imposed on domestic airlines in 2020 during the COVID-19 pandemic from August 31, the country’s civil aviation ministry said on Wednesday, lifting restrictions on ticket prices. The government, in a rare move, had regulated fares by imposing a minimum and maximum band based on the flight’s duration to prevent ticket prices from spiking due to pent-up demand arising from restrictions on air travel easing. Given the current situation, airfares may go up as carriers as jet or aviation turbine fuel (ATF) prices have almost tripled in the last two years.
The ministry had imposed lower and upper limits on air fare after the resumption of services in May, 2020 following the two-month nationwide lock-down to contain the spread of Covid-19. Thereafter, the limits were relaxed in a phased manner as per the improvement in air traffic in the country. The lower caps were meant as a relief for airlines struggling after the pandemic. At the same time, the upper caps on air fare were fixed ensuring that passengers do not have to pay a hefty amount for air travel.
Earlier, discussions on removing the fare bands for domestic air fare were held among the stakeholders, including the government authorities and airlines. The airlines were of the view that removal of the pricing cap is required for the full-fledged recovery of domestic air traffic.