Winning Bizness Desk
Mumbai. Airlines will now be able to fix the ticket price without any restrictions as government is going to completely remove the air fare cap imposed during the corona pandemic. Both the upper and lower limits of airfare are being removed and this will come into effect from August 31. The fair cap is currently applicable on a rolling basis in cycles of 15 days. That is, airlines are free to fix the prices of tickets after a period of 15 days from the date of booking. Civil Aviation Minister Jyotiraditya Scindia said, "The decision to remove the airfare cap has been taken after careful analysis of the daily demand and prices of air turbine fuel."
Let's understand cap with an example
Let us understand 15 day cap with an example. If a person has to go from Ahmedabad to Mumbai after 15th August i.e. 5 days from today, then he will have to pay around Rs 4200 for Akasa Air flight. This ticket rate is almost the same for 14 days from today's date. But as soon as you see the fare for 25th (15th day), it is almost half. That is, you will get a ticket for 2100 rupees. That is, the airline wants to offer cheap tickets to the customers but due to the price cap, they are not able to do so.
Airline may give discount in tickets
The decision to remove the airfare cap from airlines will bring relief to IndiGo, SpiceJet, Air India, Vistara and new airline Akasa, among others. In fact, India is witnessing a strong rebound in domestic air travel. Passenger numbers are touching pre-Covid levels resulting in revenue increase. Aviation experts have termed it as positive for passengers and said that in order to increase the number of passengers, airlines can give discounts on tickets.
Price cap was imposed in May 2020
On the resumption of services on 25 May 2020 after a two-month lockdown due to Corona, the Aviation Ministry imposed lower and upper limits on airfare based on flight duration. The lower fare band was introduced to help airlines struggling financially due to travel restrictions. The upper limit was imposed so that passengers are not charged more fare if the demand for seats is high.