The Ministry of Civil Aviation Thursday said it would implement a fare cap for domestic air travel for three months citing a possible surge in airfares due to pent-up demand. It also issued standard operating procedures with specific pre-flight, in-flight and post-flight guidelines that include arriving at the airport at least two hours prior to departure time, mandatory use of face masks, clearance from Aarogya Setu app and compulsory web check-in.
The SOPs require passengers to adhere to health protocols prescribed by the destination state or Union Territory. A senior civil aviation ministry official said ideally the passengers need not undergo quarantining, but the ultimate decision will rest with the states.
While airlines did not offer an official comment on the proposal to cap fares, they said a minimum fare would help only if intrinsic demand was muted, but setting an upper cap could create shortages like that for trains.
On how the price cap will work, government officials said, a flight from Delhi to Mumbai will have a ceiling of Rs 10,000 and a floor of Rs 3,500, with 40 per cent of tickets to be sold below the median price.
The fare limits have been divided into seven bands according to the flight duration, with the Delhi-Mumbai route figuring in the middle band. The first band, with its specific lower and upper fare limits, comprises flights with a duration of 40 minutes or less. The second, third, fourth and fifth bands are for flights with duration of 40-60 minutes, 60-90 minutes, 90-120 minutes and 120-150 minutes, respectively.
“With capacity falling from 100 per cent to 30 per cent, fares could have sky rocketed. Once we exit the three month period (on August 25), we can have a market-based system or a pre-Covid kind of arrangement,” said Civil Aviation Minister Hardeep Singh Puri.
Addressing reporters Thursday, Civil Aviation Secretary Pradeep Singh Kharola said: “Airlines have a system of buckets, this fare band is split into buckets and then seats are allotted in different buckets. Only a lower and upper cap may create problems as airlines may sell all at the highest price. So we are putting a second rider, that 40 per cent of seats have to be sold at a fare less the mid-point of the band, which is around Rs 6,700.”
An airline executive, who did not wish to be named said if intrinsic demand was muted, then the minimum fare would help in general. “When demand is muted and minimum fare is higher than what it would otherwise have been, the weakest or least attractive player suffers the most as it cannot use pricing as a tool to steal share. Then the demand goes to the stronger players offering that fare. The least attractive players get the leftovers and suffer. If demand is high, then the minimum fare does not matter much. But setting a cap will create shortages like we see for trains,” the executive said, making a case for the fares to be left on the market.
In addition to the temporary fare control, the government said Monday onwards airlines would be allowed to fly to all airports across the country, albeit with one-third capacity of the decided summer schedule on routes connecting metros to metros and those connecting metros to non-metros with more than 100 departures a week. For the other routes, the airlines will be free to operate as many flights as needed. Further, the airlines will also be subjected to the route dispersal guidelines as per which they have to fly to small under-served airports.
The standard operating procedures also laid down the measures needed to be undertaken by passengers, airlines and airports for a flight to operate. For passengers, these include arriving to the airport at least two hours prior to the flight timing, mandatory use of face masks, clearance from Aarogya Setu app, compulsory web check-in, use of only authorised taxi service to arrive and depart from the airport, among others. For the airlines, the measures include provision of personal protective equipment such as three ply face masks, face shields and hand sanitisers, ban on serving of meals and in-flight retail sales, ban on provision of magazines and newspapers on board, among others.
Passengers have also been advised to carry minimum check-in baggage and trolleys will be allowed only sparingly. Additionally, passengers will only be allowed to carry one cabin baggage with themselves.
Notably, the travelling passengers will need to adhere to health protocols as prescribed by the destination state or Union Territory governments.
The Directorate General of Civil Aviation issued a set of fare buckets detailing the ceilings and floors for each of the bands. According to this, the lowest fare on the first band, which includes routes such as Bengaluru-Chennai, Bhopal-Mumbai, Agartala-Guwahati, Delhi-Jaipur, Delhi-Chandigarh, etc, will be Rs 2,000 while the maximum fare will be Rs 6,000.
For the second band, including routes such as Delhi-Srinagar, Ahmedabad-Mumbai, Bengaluru-Goa, Hyderabad-Mumbai, Kolkata-Patna, ticketw will be priced between Rs 2,500 and Rs 7,500. Similarly, the third band that includes flights such as Bengaluru-Mumbai, Delhi-Patna, Bengaluru-Pune, will be charged between Rs 3,000 and Rs 9,000. The fourth band, which has routes such as Delhi-Mumbai, Delhi-Hyderabad, Delhi-Kolkata, Bengaluru-Ahmedabad, Kolkata-Bengaluru, will have a floor of Rs 3,500 and ceiling of Rs 10,000. The fifth band with routes such as Delhi-Bengaluru, Goa-Delhi, Bengaluru-Patna, Mumbai-Patna, Kolkata-Ahmedabad, Hyderabad-Guwahati, will be charged between Rs 4,500 and Rs 13,000.
For flights of 150-180 minutes duration such as Delhi-Imphal, Dibrugarh-Delhi, Delhi-Calicut, Bengaluru-Guwahati, the lower limit will be Rs 5,500 while the upper limit will be Rs 15,700. For flights of 180-210 minutes duration such as Delhi-Coimbatore, Delhi-Thiruvananthapuram, Delhi-Port Blair, the lower and upper fare limit is Rs 6,500 and Rs 18,600, respectively.
Notably, these are economy class fares, and are exclusive of user development fee, passenger service fee and goods and services tax. Further, these fares are not applicable on UDAN flights.
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