Economy

Govt extends domestic airfare cap till Nov 24

New Delhi | Updated on July 24, 2020 Published on July 24, 2020

Could delay opening of regular international operations

The government has extended the cap on domestic airfares at the upper and lower levels till November 24. This is a three-month extension as earlier the fare cap was to remain in place till August 24. It has also been decided that domestic flights will remain at the current 45 per cent till November 24.

The government order could also have an impact on the restarting of normal international operations by airlines as the government has been clear that this will be allowed only when domestic flying reaches 50 per cent or more.

Hardeep Puri, Minister for Civil Aviation, had hinted at extending the fare cap at his recent press conference. “The way (passenger) demand is going now at still less than 33 per cent you may need a short extension. This is my view,” he had said. The latest domestic air passenger numbers validate what the Minister said. In June, domestic airlines flew 83.5 per cent fewer passengers at 19.84 lakh as against the 1.2 crore passengers flown previously.

The combination of States having different quarantine regimes, major airports such as Mumbai and Kolkata refusing to accept more than a handful of flights and the public being scared about the spread of the pandemic have taken a toll on domestic airlines.

When domestic flights restarted on May 25, the government put up a fare band which stipulated a lower and upper limit on what domestic airlines could charge for the cost of an air ticket.

The government also stated that at least 40 per cent of the seats had to be sold at a fare that was less than the mid-way point of the band, which is approximately ₹6,700 or below in case of a one-way Delhi-Mumbai flight ticket.

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Published on July 24, 2020
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