Indian flyers may brace for airfares to get dearer in the coming holiday season and cheaper during lean periods or to certain destinations as the government will do away with the pandemic spurred minimum and maximum fare caps from August 31, letting airlines charge in line with demand and supply.
Fare bands were introduced in India on May 25, 2020, as part of measures and restrictions for domestic flights to resume operation after a two-month Covid-induced suspension. These bands, as of now, are effective for tickets purchased for travel within 15 days.
A return to the pre-pandemic system could render struggling airlines even more vulnerable to fare wars from stronger players amid escalating operating costs because of high jet fuel prices and a weak rupee. According to the government, the move will spur growth in the pandemic-hit aviation sector.
According to union aviation minister Jyotiraditya Scindia, “The decision to remove air fare caps has been taken after careful analysis of daily demand and prices of air turbine fuel. Stabilisation has set in and we are certain that the sector is poised for growth in domestic traffic in the near future."
Airlines were lately demanding an upward revision of fare caps as jet fuel prices have almost tripled in the past two years - more so after global crude oil prices rocketed up since the Russia-Ukraine war broke out this February. The weak rupee against the dollar made matters dire for the airlines, prompting them to seek excise relief on jet fuel.
