Airfares may be capped during crises

The government is set to hold talks with domestic airlines to cap airfares on short routes during natural calamities or unpredictable situations, Civil Aviation Minister Ashok Gajapathi Raju said.

“The Ministry will commence the process of consultation with stakeholders, including airlines to explore the possibility of appropriately containing the fares for short duration on the affected sectors during natural calamities, agitations etc,” Mr. Raju said in his reply to a debate on the Demand for Grants for the aviation ministry in Lok Sabha.

During the debate, many Members of Parliament had voiced concerns related to steep increase in airfares during “unpredictable disruptions in transport services on account of natural calamities or agitation.”

The civil aviation minister said the government had intervened during the Chennai floods to cap airfares on certain routes. “During the Chennai floods, alternate flight operations were commenced from the Arakkonam airbase of the Navy with the active cooperation of many airlines and capping of fares from Arakkonam to Bengaluru and Hyderbad at Rs.2, 000.”

This is not the first time that the government will hold meeting with domestic carriers on the issue of capping airfares. The Civil Aviation Ministry had held two rounds of consultations asking airlines to create a mechanism to check airfares. Mr. Raju had said then that that high price of air tickets was giving a “bad name” to the aviation sector. The airlines had opposed the idea of capping airfares.

Citing the recent Jat agitation, Trinamool Congress leader Saugata Roy had asked the government on Monday to regulate airfares in similar situations. Some domestic carriers had charged exorbitant airfares on the Delhi-Chandigarh route during protests by the Jat community, demanding job reservations, in the National Capital Region (NCR).

Allaying concerns on rising airfares recently, Mr. Raju said that airlines have passed on the benefits of declining aviation turbine fuel (ATF) to passengers, as per a study conducted by the government during January-March this year.

“We did an analysis of 23 routes and we realised that in the airfares from January-March, 2015 to January-March, 2016 there was a reduction, the average being 18.10 per cent which translates into a reduction of ATF and that being passed on to the consumers,” the Minister said. Some Parliamentarians had sought action strong action against airlines for “looting” passengers as they had alleged airfares remained high despite decline in jet fuel prices which accounts for over 40 per cent of airline’s operational costs.