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No airfare cap this festive season, Centre to ask airlines to keep prices reasonable
Civil Aviation Minister K Rammohan Naidu the government has previously engaged with airlines to address airfare concerns during festivals and other important events.
Civil Aviation Minister K Rammohan Naidu said the pressure on ticket prices is also linked to the ongoing crisis in West Asia, which, he said, has pushed up the cost of aviation turbine fuel (ATF). (Express photo)
The government is not planning to cap airfares during the upcoming festive season, Civil Aviation Minister K Rammohan Naidu said Tuesday. However, airlines will be advised to keep ticket prices at a ‘reasonable level,’ he said, noting that higher fuel costs had increased operating expenses of aviation companies.
Naidu made the remarks while speaking to reporters on the sidelines of the signing of agreements for the next phase of UDAN scheme, a regional connectivity programme to make air travel affordable.
He said the government has previously engaged with airlines to address airfare concerns during festivals and important events.
“We engage with the airlines continuously; we also have regular meetings with them. And we definitely point it to them that during this festive season, you have to ensure that the fair prices are kept at a reasonable level so that the people who want to travel, especially in these important times, get to see the benefit,” the minister said.
The minister also attributed the pressure on ticket prices to the ongoing crisis in West Asia, which, he said, has pushed up the cost of aviation turbine fuel (ATF). Fuel constitutes a significant share of an airline’s overall operating expenses.
“This is not necessarily because of the festive season or anything, but there is an ongoing crisis situation,” he said.
According to Naidu, ATF accounts for around 40 to 43 per cent of airfares. As a result, even a marginal increase in fuel prices has a direct impact on the cost of air tickets.
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The government has taken several measures this year to shield airlines from the sharp volatility in jet-fuel prices triggered by the West Asia crisis. In June, the Union Cabinet approved a Rs 10,000-crore price stabilisation fund to provide support to public sector oil marketing companies and enable them to keep ATF prices for scheduled Indian airlines stable for three years.
The move came after jet-fuel prices surged sharply in the international market, putting pressure on airline operating costs and raising concerns over higher airfares.
The impact of fuel prices has also been reflected in airline pricing decisions this year. In April, IndiGo revised its domestic fuel surcharge to a distance-based structure ranging from Rs 275 to Rs 950 after a sharp increase in ATF prices, while Air India also raised fuel surcharges on several domestic and international routes.
ATF prices in Delhi had briefly risen to a record Rs 2.07 lakh per kilolitre amid the West Asia crisis, although the rate applicable to scheduled domestic airlines was subsequently kept substantially lower following government intervention.
© The Indian Express Pvt Ltd
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