Home / Companies / News /  Government extends cap on domestic airfares by three months

The government has extended the cap on domestic air fares by three months to 24 November, the country's aviation watchdog Directorate General of Civil Aviation (DGCA) said in a circular on Friday.

The cap set on the capacity that airlines are allowed to operate upto -- currently at 45% -- has also been extended by the same period, the DGCA said in a separate circular.

"The deadline extensions are given keeping in mind that passenger load factors haven't picked up," said a senior official with the aviation regulator, requesting anonymity.

"Some states have entry restrictions while others don't. This will eventually change as the number of cases fall," the official said adding that decisions on deadline extensions will be reviewed frequently as the situation evolves.

Indian airlines, operated up to fourth of their capacity in June, as the surge in covid-19 cases and restrictions imposed by states led to muted travel demand.

The passenger load factor of major scheduled commercial airlines stood between 54% and 68%, which showed that carriers could fill up to two-thirds of the total seats. In June 2019, the passenger load factor stood at 81-94%.

Load factor, or passenger load factor, is an aviation industry metric that measures an airline’s passenger-carrying capacity.

Indian airlines resumed domestic operations from 25 May, after being grounded for two months during a nationwide lockdown to contain the covid-19 pandemic. The government, then, set a 33% cap on the capacity while allowing them to restart operations, which was increased to 45% during June.

This was the first time that the Indian government has implemented such a measure for an extended duration. Caps on airfares were generally restricted to about a few days during calamities like floods.

"Airline fares shouldn't be regulated by the government even during a pandemic as airlines are already burdened with huge costs amidst muted passenger demand," said a senior airline official, who requested anonymity.

"During times like this, airlines should be allowed to set its own fares," the official added.

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