Centre asks airlines to apply price moderation, as airfare shoots up

Average one-way spot fare on Delhi-Leh route saw 125% rise to an average of ₹13,674 during the May 3-10 period compared to April 20-28, as per data shared by a travel portal

Airfare shoots up

New Delhi: The ministry of civil aviation (MoCA) has asked the airline companies to exercise moderation and do the balancing act in pricing of tickets amid a spike in airfares on certain routes especially after suspension of flights by Go First.

A senior officer of the MoCA, however, clearly said that there was no intent of the government to regulate airfares. “We want that there shall not be a huge gap between the tickets sold in the lower and upper fare buckets by the airlines,” said the officer.

Airfares in certain routes shot up massively after the cash strapped Go First airline grounded its aeroplanes in what could be said as a big jolt to the Central government’s plan to boost the aviation sector. “There has been a steep increase in fares in certain sectors since the Go First suspended its flight operations since May 3,” the official added. The routes, which is costly to travel are Delhi-Srinagar and Delhi-Pune. Also, the reduction of capacity due to the Go First crisis has come at a time when peak domestic air travel period is round the corner.

Also Read: Go First suspends ticket booking till May 22, airfares go up

The MoCA official told reporters that airlines have been asked to “exercise moderation” and “maintain some kind of balance” in terms of pricing of tickets. There cannot be a situation where there is a huge gap between the lowest and highest fare buckets, and passengers should not face hardships in terms of exorbitant fares, the official said on the condition of anonymity. There are no plans to regulate airfares, the official said.

The civil aviation sector in the country has begun facing crisis of planes in operation after the Go First, currently undergoing voluntary insolvency resolution proceedings, has cancelled flights till May 26. Another budget airline IndiGo too has grounded many of its aircraft owing to engine issues with Pratt & Whitney. The SpiceJet is also facing financial crisis to operate its planes with full capacity.

Exuding confidence that the aviation sector would bounce back soon, the official said that capacity is an issue which would be resolved once the Go First resumed the flight operation. “It would help ease the situation before the peak travel season in June,” he added.

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In April, domestic airlines flew 128.88 lakh passengers, as per the latest official data. There has been a steep jump in airfares on certain routes where Go First was operating. For instance, the average one-way spot fare on Delhi-Leh route saw a 125% rise to an average of ₹13,674 during the May 3-10 period compared to April 20-28 period, as per data shared by travel portal Ixigo. During the same comparable periods, average one-way spot fare witnessed an increase of 86% to ₹16,898 on Delhi-Srinagar route, the data showed.
After deregulation of the country’s airline sector, airfares are market driven and are neither established nor regulated by the government.

Airline pricing runs in multiple levels (buckets or Reservation Booking Designators). Civil aviation minister Jyotiraditya Scindia, on March 16, informed the Lok Sabha that “airfares are neither established nor regulated by the government”. “The airline pricing system runs in multiple levels (buckets) which are in line with practices being followed globally.

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The prices are fixed by airlines keeping in mind the market, demand, seasonality and other market forces. The airfare increases with increase in demand for seats as the lower fare buckets get sold out fast when bookings are offered by airlines, he had said in a written reply.

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