The administration reportedly stated that prices have drastically decreased this week on popular routes and rejected the idea of setting a cap on prices because doing so would harm competition and the benefits it brings. According to a representative of the civil aviation ministry, during the past week, airfares have dropped by approximately 60% as a result of the ministry’s participation. The official added that the Director General of Civil Aviation (DGCA) is not authorized to control the financial aspects of air travel and civil aviation. 

In particular, after Go First ceased operations on May 3, as well as because of a halt in aircraft deliveries to Indian carriers amid global supply chain restrictions, passenger demand outstripped supply during the country’s popular summer travel season, causing airfares to soar. 

Jyotiraditya Scindia, the minister of civil aviation, instructed airline executives last week during a meeting to “self-monitor” prices on routes that have experienced significant price increases. The official cited above claimed, based on data gathered by the tariff cell of the aviation authority, that after the minister’s action, ticket costs on June 13 (Tuesday), compared to June 5, had reduced by 13% to 56%.

Airlines were asked by Scindia to create a system that would ensure fair pricing within high RBDs (reservation booking designator). RBDs are pricing slabs that airlines employ for airplane tickets, with the cheaper fare being made available for advance purchase much earlier and prices increasing as the departure date gets closer. 

The official defended the choice to leave airfares uncapped by stating that domestic aviation was completely deregulated in March 1994 after the Air Corporations Act was repealed. “The direct impact of deregulation is that a passenger in a lower income group has been able to travel by air due to competition among airlines,” the individual claimed.

India experienced the highest increase in airfares among the top 10 aviation markets in Asia-Pacific and West Asia between the fourth quarter of 2019 and the fourth quarter of 2022 in nominal terms, rising by over 43%, according to research by Hong Kong-based Airports Council International (ACI).

Source- travel biz