The civil aviation ministry on Wednesday announced that it will remove the fare caps it had imposed on domestic airlines from August 31.
The government had imposed lower and upper limits on domestic airfares based on flight durations after air travel resumed on May 25, 2020, after a two-month nationwide lockdown due to the Covid-19 pandemic.
This was done to protect the financially weaker airlines and passengers from high fares, according to PTI.
Union Aviation Minister Jyotiraditya Scindia on Wednesday said the decision to remove restrictions on ticket rates was taken after an analysis of daily demand and prices of air turbine fuel.
“Stabilisation has set in,” Scindia wrote in a tweet. “We are certain that the sector is poised for growth in domestic traffic in the near future.”
Recently, several airlines had been demanding an upward revision of fares citing the rise in prices of turbine fuel, The Times of India reported.
On June 19, Vistara Chief Executive Officer Vinod Kannan had said that he would be happy if the lower and upper limits on airfares were increased. “But the best solution would be for the airlines to have absolute freedom in deciding airfares,” he added.
The price of turbine fuel had touched record levels, primarily due to the Russia-Ukraine war that began on February 24.
In February 2021, Hardeep Singh Puri, who was then the civil aviation minister, had told Parliament that the fixed fare bands for domestic flights could not be permanent.
“It is not our intention and can not be in an open market deregulated situation to have the fare band made a permanent feature,” he added.