Effective today, August 31, the Ministry of Civil Aviation, Government of India, removed the airfare caps on domestic flight tickets, giving Indian air carriers more freedom to set passenger fares.
People who intend to travel by air over the holidays will be significantly impacted by this. The change is anticipated to give airlines more freedom to set their own fares.
The civil aviation ministry announced earlier this month that the restrictions on domestic airfares would be lifted as of August 31.
After review of the current status of Scheduled Domestic Operations viz-a-viz passenger demand for air travel, it has been decided to remove the fare bands notified from time to time regarding the airfares with effect from 31.08.2022. pic.twitter.com/SnLUcW7Rjr— MoCA_GoI (@MoCA_GoI) August 10, 2022Advertisement
It should be noted that, as air travel resumed following the nationwide Covid-19 lockdown in May 2020, the government imposed lower and upper limits on domestic airfares. While the government permitted 100% capacity deployment in October 2021, it maintained the pricing regulation.
Lower caps were put in place to protect financially weaker airlines, while upper caps were put in place to protect passengers from high fares.
And according to Aviation Minister Jyotiraditya Scindia, the purpose of the airfare bands is to safeguard the interests of both airlines and customers.
Impact of Domestic fares
Since there are no longer any price restrictions as of today, August 31, airlines are free to charge passengers whatever they see fit. To draw more passengers, the airlines may reduce the cost of domestic flight tickets.
Earlier, Indian airlines were unable to offer discounts prior to the government-imposed lower and upper price caps on domestic airfare.
Many experts believe that airlines will lower their prices on specific routes in order to increase their competitiveness. On the other hand, it may result in a price increase on certain flight routes, particularly those between metros.