India: Airlines reduce domestic airfares on several routes

Airfares have dropped on several routes after Aviation Minister Jyotiraditya Scindia asked airlines to rein them and as a result of this intervention, domestic airfares have declined by up to 60 per cent.

"As a result of this intervention, prices have seen up to 60 per cent decline. This is being monitored daily by the Minister himself," as per ministry sources on data by DGCA's Tariff Monitoring Unit.

The official source further stated, "Airfares internationally have remained firm on account of various factors like the opening of markets after the pandemic and the resultant surge in demand, rise in ATF prices globally, supply chain disruptions on account of both Covid and Ukraine-Russia conflict... The rise in airfares has been mostly seen on select routes that were earlier being serviced by GoFirst. A meeting with the airlines was held on June 5, 2023, where airlines were strictly advised to self-regulate fares on certain select routes that have seen considerable surge pricing of late. A mechanism for ensuring reasonable pricing within the high reservation booking designator (RBD) will be devised by airlines."

"This is being monitored by the DGCA. During any calamity, airlines need to keep a tight check on the pricing of air tickets in view of the humanitarian situation and monitor and control any surge in ticket prices to/from that region. In the case of the unfortunate Odisha tragedy, airlines were advised to provide free carriage (cargo) services to the families of the deceased," it stated.

Even in the case of Delhi - Ahmedabad the Minimum D1 fares which were as high as 60 per cent till Monday have come down to 20 per cent, the report said.

Earlier on June 7, Civil Aviation Minister Jyotiraditya Scindia said that airfares on certain routes from Delhi have been considerably reduced by 14 to 61 per cent following the airlines' advisory group meeting.

Scindia explained that airlines have the authority to determine airfares and various factors are taken into account including market dynamics and season. The aviation industry employs an algorithm for pricing decisions.

"The airlines have been given rights to fix airfares which are market controlled. The aviation market in the country is season based. The rates are also fixed accordingly. If capacity is low and demand is high and input costs are not reduced, then rates will be high. There is an algorithm to decide the fare," he said.

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