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Business News/ News / India/  Explained: Will domestic flight tickets get more expensive from today?

Explained: Will domestic flight tickets get more expensive from today?

From August 31, the government is lifting the price cap on domestic tickets.

People who travel by air will be impacted by the lifting of the price cap.Premium
People who travel by air will be impacted by the lifting of the price cap.

Beginning on August 31, the government will lift the cap on domestic airfare prices after more than two years. People who travel by air will be impacted by this. The change is anticipated to allow airlines more freedom to set their own fares.

“After review of the current status of Scheduled Domestic Operations viz-a-viz passenger demand for air travel, it has been decided to remove the fare bands notified from time to time regarding the airfares with effect from 31.08.2022," the Ministry of Civil Aviation earlier said.

What type of price caps were there?

For domestic flights lasting under 40 minutes, airlines were now prohibited from charging a customer less than 2,900 (excluding GST) and more than 8,800 (excluding GST).

Why to remove price caps?

The decision was made taking into account the recent drop in the price of jet fuel. When domestic air travel resumed in May 2020 following the nationwide coronavirus lockdown, the Centre had established lower and upper caps.

Even when air travel reached its full operational capacity in October 2021, the government kept the price limitations in place. While the lower restrictions were put in place to assist the financially weaker airlines, the upper caps were put in place to protect the passenger from high charges.

Will domestic flight tickets be more expensive?

Technically, since there are no pricing caps, the airlines are free to set their own prices. However, to attract more passengers, the airlines can lower the cost of flight tickets.

Prices for aviation turbine fuel (ATF) dropped earlier after rising to record levels as a result of the conflict in Ukraine. Every month, on the first and sixteenth, ATF prices are changed in accordance with benchmark international oil prices from the previous two weeks.

Vinod Kannan, CEO of Vistara, stated on June 19 that - while he would be pleased if the lower and higher limitations on airfares were raised - the greatest option would be for the airlines to have complete discretion over pricing.

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Published: 31 Aug 2022, 07:47 AM IST
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