Capping airfare could backfire: govt

Capping airfare could be counter-productive, Civil Aviation Minister Ashok Gajapathi Raju said on Saturday adding that the Ministry is examining the issue.

Raju said competition among the airlines will take care of higher airfares even as there are complaints about arbitrary airfare hikes for last- minute bookings.

Asked about capping air ticket prices, Raju told reporters that floors and caps did exist before 1994.

“So do we want to make it a regulated affair or not? If you put a cap, the floor will go up. This is the problem,” he said.

“The idea is not to regulate for the sake of regulation. We don’t want to push up the cost of tickets for the majority,” he said.

Citing an analysis by the Directorate General of Civil Aviation (DGCA) about airfare, he said only around 1.7% of the tickets were priced higher. “So about 98% of the tickets were reasonably priced,” he added.

Civil Aviation Secretary R N Choubey said capping airfares is an issue which continues to be under consideration of the ministry.

He said a final view on the issue is to be be taken. “The examination of the issue is very much continuing,” he said.

A recent analysis by a travel portal showed that airfare decreased up to 35% on domestic routes and up to 16% on international routes during April-June this year compared to same period last year.

Parliamentarians and fliers were complaining that the airlines were jacking up prices, especially for last minute bookings. The issue was raised in Parliament in the recently concluded session once again  but Civil Aviation Ministry has said that it could not interfere in such matters.