Centre likely to do away with fare bands for air travel as traffic picks up

Fare bands were introduced to ensure airlines don't sell very low prices in a cut-throat market or exorbitant prices either

The Centre is likely to scrap fare bands as domestic air travel picks up pace in the face of the Covid-19 pandemic.

Civil Aviation Minister Hardeep Singh Puri told a parliamentary panel that air traffic has now reached three lakh per day - nearing pre-Covid levels and is set to rise further in the summer.

“In the summer schedule, as domestic traffic would increase more, the fare bands and some other restrictions are likely to be done away with,” the minister told a meeting of the parliamentary consultative committee on civil aviation.

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As the government reopened domestic civil aviation in May last year after lockdown, it had imposed seven fare bands specifying a lower and a higher limit for prices of air tickets.

The minister said the fare bands – an extraordinary measure – were introduced to ensure that airlines do not sell cheap tickets in a cut-throat market as also to check unusually high prices in the face of limited availability.

Last week, the Directorate General of Civil Aviation had revised the fare bands with effect from April 1 in the range of 10%-12% with the limit on maximum fare raised by 30%.

For routes with a flight time between 90 and 120 minutes, the lower fare cap has been increased to Rs 3,900 from Rs 3,500, whereas the cap on maximum chargeable fare has been increased to Rs 13,000 from Rs 10,000.

Routes like Varanasi-Jaipur, Ahmedabad-Kolkata, Bengaluru-Bhopal and Delhi-Bhubaneshwar among others fall under this category.

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According to DGCA figures, domestic airlines ferried 77.3 lakh passengers in January, an increase of 5.3% over the previous month.

However, the figures were almost 40% lower than the number of passengers the airlines had ferried in January 2020, when the Covid-19 pandemic had not reached India yet.

Due to the Covid-19 outbreak, scheduled domestic operations were suspended from March 25, 2020, which were subsequently resumed in a calibrated manner from May 25, 2020, with fare capping (lower and upper limit) to ensure that airlines do not charge excessive fares and the journey is performed only for essential purposes.

The order for capping of fare is valid up to March 31, 2021. The domestic scheduled operations at present have been opened up to 80% of the Summer Schedule 2020.