Civil aviation ministry has said it is not planning to cap fares. The ministry which has been receiving complaints from parliamentarians over unreasonable fare hikes in peak season said it is not considering a mechanism for capping of airfares to curb predatory pricing.
"Air fares are not regulated by the government. Airlines are free to fix tariff under the provision of sub-rule (1) of Rule 135, Aircraft Rules 1937 having regard to relevant factors, including the cost of operation, characteristic of services, reasonable profit and the generally prevailing tariff," minister of state for civil aviation Mahesh Sharma said in a written response to Rajya Sabha today.
The government has been toying with the idea of capping fares. The idea was revived when SpiceJet went into a crisis last year. A ministry's internal note proposed capping the highest economy fares at Rs 20,000 but the government did not pursue the idea. The matter was not discussed with the airlines who are opposed to the proposal.
Amongst other countries Saudi Arabia has experimented with fare capping for its airlines but later it relaxed its decision, aviation sources said.