Maximum airfares drop up to 61% after govt intervention, says Scindia

Don't wait for govt to point out odd fares: Scindia

Maximum airfares on certain busy routes from Delhi dropped between 14 per cent and 61 per cent in the past two days, Civil Aviation Minister Jyotiraditya Scindia, who had instructed airlines in a meeting on June 5 to keep fares reasonable, said on Wednesday.

“I am happy to say that the maximum fares on flights connecting Delhi with Srinagar, Leh, Pune and Mumbai dropped 14-61 per cent on June 6. The Directorate General of Civil Aviation (DGCA) and my ministry are monitoring fares on a daily basis," Scindia said.

Clarifying that the government was not considering regulating fares like it did during the Covid-19 pandemic, the minister said it was for airlines to proactively monitor fares as part of their social objective and not wait for the government to point out abnormalities.

“The fare bands imposed during the pandemic were to protect airlines, which had all their planes on ground, and to safeguard passengers from predatory or extensive pricing.” 

He said he did not think regulating fares was an option in a deregulated sector. But “we cannot have fares that are way beyond what they should rationally be”.

Flights to and from cities like Srinagar, Pune, Ahmedabad, Mumbai, and Leh — where low-cost carrier Go First had a sizeable presence — had seen the biggest pressure on fares in the past few weeks. Go First, which is currently under an insolvency resolution process, stopped operating flights on May 3.

The minister pointed out that the capacity squeeze on account of Go First's exit and the onset of a holiday season led to an increase in fares.

There was a sudden surge in bookings, especially in the D-15 booking window (15 days before the departure date) due to cancellation of flights, said Gaurav Patwari, vice-president (air category), Cleartrip. “Routes where Go First had a significant capacity saw an unprecedented jump in loads and fares.”

A ticket purchased way ahead of time is priced cheaper, as it comes from the lower fare band/bucket, while one booked just 24-48 hours before departure falls in the highest fare bucket opened by the airline. Scindia said the airline algorithms that control revenue management must also have a limit.

On Go First, the minister said: "We are desirous and hopeful that it resumes operations. The airline submitted a plan and we asked some questions. They are supposed to revert. Once the DGCA has examined, we shall give our approval and they (Go First) shall move forward."

The government has asked aircraft manufacturers like Airbus and Boeing to supply planes to their Indian customers as soon as possible because here we have demand but no capacity, he added.

The ministry's role is that of a facilitator, not regulator, because the growth of airports and airlines pushes the growth of facilities that common people avail of, he said.

Even as Go First stopped operating flights last month — four years after another carrier, Jet Airways, went bankrupt — the minister pointed out that India had also got a new major airline, after nearly 25 years, in Akasa Air. "It (Akasa) had just two planes. That has now gone up to 12. And it has the ambition to grow to about 70 planes."

As regards new regional carriers, Scindia said many like Star Air, IndiaOne Air and Flybig had now taken off with the help of the government's regional connectivity scheme UDAN. “I do hope many more airlines will come forward.”