How changes in airfare rules from August-end will affect prices
India's airline sector is soon likely to breathe a sigh of relief following major changes in air ticketing rules. The Centre has announced the restrictions it imposed on airfares when the COVID-19 pandemic began will be lifted soon. From August 31, airlines will be able to charge whatever they want from passengers. The new rules are said to allow airlines to offer discounts, too.
Why does this story matter?
The decision comes at a time when the airlines in India are embroiled in controversies after multiple cases of technical problems midair. Since the COVID-19 pandemic began, almost all operators have been reporting significant losses. Following the fresh development, some companies have stated that airfares are no longer restricted. So, they may provide discounted tickets in order to boost the number of travelers.
How did the experts react to Centre's move?
Most experts see the government's move as a positive development to ease the burden on both passengers and operators. "I see this as a positive for passengers as fares should come down," Vinamra Longani, Head of Operations, Sarin & Co, told NDTV. "I think it [is] an excellent move for the consumers as well as the airlines," said Parvez Damania, an aviation sector expert.
Aviation sector poised for growth in domestic traffic: Minister
"The decision to remove airfare caps has been taken after careful analysis of daily demand and prices of air turbine fuel," Civil Aviation Minister Jyotiraditya Scindia said in a tweet. "Stabilization has set in & we are certain that the sector is poised for growth in domestic traffic in the near future," he added while sharing the government order on the airfare rules.
Look at the minister's tweet here
Why did government regulate rates earlier?
Following the pandemic and consequent drop in air traffic, the government had restricted airfares by enforcing a minimum and maximum band in an unprecendented action. These lower/upper limits were dependent on the trip duration to prevent costs from increasing due to pent-up demand caused by the relaxation of air travel restrictions in 2020. Aviation was one of the most impacted sectors during the pandemic.
