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Govt asks airlines to exercise moderation in pricing air tickets amid spike in fares on some routes: Report
Airfare
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Govt asks airlines to exercise moderation in pricing air tickets amid spike in fares on some routes: Report

| @indiablooms | 19 May 2023, 11:05 pm

New Delhi: The Centre has asked domestic airline companies to ensure balance and moderation in their ticket prices amid a rise in fares on certain routes, especially after the troubled airline Go First suspended operations, media reports said.

The government does not intend to regulate airfares, however, there should not be a huge gap between the lowest and the highest fare buckets, a media report said, citing a senior official.

India is among the fastest-growing aviation markets in the world and the air traffic in the country has been growing after contracting significantly under the impact of the coronavirus pandemic.

After Go First stopped flying on May 3, there has been a significant increase in airfares on some routes such as Delhi-Srinagar and Delhi-Pune, the report said.

Furthermore, the Go First crisis has also resulted in a reduced capacity at a time when the peak domestic air travel period is close.

Go First, currently undergoing voluntary insolvency resolution proceedings, has announced the cancellation of flights until May 26.

IndiGo has also grounded several planes due to Pratt & Whitney engine problems, and SpiceJet is also faced with financial challenges.

The official noted that there are capacity constraints in the current situation and expressed optimism that the early resumption of flights by Go First would alleviate the situation before the upcoming peak travel season in June.

According to data provided by the travel portal Ixigo, there was a significant increase in average one-way spot fares on certain routes during specific periods.

For example, on the Delhi-Leh route, the average fare rose by 125% to Rs 13,674 during the May 3-10 period compared to the April 20-28 period.

Similarly, on the Delhi-Srinagar route, the average fare increased by 86% to Rs 16,898 during the same comparable periods.

Following the deregulation of the airline sector, airfares in the country are determined by market forces and are not set or regulated by the government. Airline pricing operates on multiple levels, often referred to as buckets or Reservation Booking Designators, which allow for different fare categories and pricing tiers.

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