Current rise in air fares are largely on account of “steep rise” in Aviation Turbine Fuel (ATF) and seasonal demand. The Centre, however, as an “extraordinary measure” notified fare brackets for economy tickets, the Union Civil Aviation Minister, Jyotiraditya Scindia, said on Monday.
According to a response by the Minister, in the Rajya Sabha, airlines are free to fix reasonable tariffs taking into consideration all relevant factors which include the cost of operation, characteristics of service and reasonable profit. “Airfares are market-driven and are neither regulated nor established by the Centre...Presently, increase in air fares by airlines is largely on account of steep rise in Aviation Turbine Fuel (ATF) price and seasonal demand,” he said.
Fare capping during Covid was done to ensure that the airlines do not charge excessive fares on one hand and also to ensure that the journey is performed only for essential purposes, the Minister said. He said that the fare capping orders are currently operational “on a rolling basis of 15 days cycle”. And there is no proposal, at present, to interfere with the existing regulatory framework on airfares.
Scindia said, airlines world over follow International Air Transport Association (IATA) Resolution 728 which contains information on various booking classes or Reservation Booking Designator (RBD) that defines types of different fare buckets.
Advance purchase scheme offers low fares when tickets are booked 90 days, 60 days, 30 days, 15 days and 7 days prior to departure. “Air fares are dynamic in nature and offered in multiple levels or buckets and the fares move to higher buckets as the lower ones get filled. Thus, the air fare may vary depending upon the time of booking. The air fare may also vary from what it is shown initially at the time of booking with the final price of the booked ticket as some more charges such as convenience fee, taxes etc. are added while making final payment,” he said in the response.