- Government proposes new framework for airline fare transparency.
- Airlines to submit fare structures to DGCA monthly.
- Temporary fare caps possible during extreme disruptions.
The Centre is preparing a new framework for airline fares that would require carriers to disclose their pricing structures to the aviation regulator, but stop short of bringing routine ticket prices under government control.
Temporary fare caps could still be introduced in exceptional situations, such as natural disasters or major disruptions, when passengers risk facing excessive prices, reported The Economic Times, citing a senior government official.
The proposed rules under the Bharatiya Vayuyan Adhiniyam, 2024, have received administrative approval and are expected to be published within two weeks, the Centre told the Supreme Court on Friday. The announcement prompted speculation about possible fare regulation and was followed by a sharp fall in airline stocks.
Airlines To Submit Fare Structures A Month In Advance
Under the proposed framework, airlines will have to submit their fare structures to the Directorate General of Civil Aviation (DGCA) one month before they take effect and display them on their websites.
The regulator will monitor compliance to ensure that carriers do not charge more than the highest fare category submitted to it. The requirement is intended to provide greater oversight of airline pricing without replacing the existing market-based system.
“There are no plans to interfere in the free market mechanism which fixes airfares based on demand and supply,” the official told ET.
The government would, however, retain the option of imposing fare caps in extraordinary circumstances. Previous interventions have included temporary caps or other measures during the Covid-19 pandemic, the Maha Kumbh and the Pahalgam incident.
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Delhi-Hyderabad Airfares Rise 68%: OAG Data
The proposed rules come amid steep increases in ticket prices on several domestic routes. Data from aviation analytics firm Official Airline Guide (OAG) shows that average one-way airfares for travel between September 1 and November 10 rose sharply compared with the same period a year earlier.
The Delhi-Hyderabad route recorded the biggest increase among the routes cited, with average fares rising 68% year-on-year. Mumbai-Kolkata fares climbed 51%, while Delhi-Goa and Mumbai-Bengaluru recorded increases of 39% and 37%, respectively.
India deregulated airfares in 1994, allowing airlines to determine ticket prices based on operating costs, the services they offer and reasonable profit expectations. Prices can consequently vary with demand, while limited flight options during busy travel periods can add to the pressure on passengers.
Higher ATF Prices Add To Airlines’ Cost Burden
Aviation turbine fuel (ATF) prices have emerged as another challenge for airlines. Union Civil Aviation Minister Ram Mohan Naidu said last week that the ministry wanted fares to remain reasonable, but volatile fuel prices were making that difficult.
Naidu also cited the West Asia crisis as a factor affecting ATF prices and said the ministry was discussing the issue with airlines and oil marketing companies.
IndiGo, Air India, Air India Express and Akasa Air have raised or introduced fuel surcharges in response to higher ATF prices, adding to the cost of flying.
The new framework is expected to strengthen scrutiny of airline pricing and make fare structures more transparent. However, routine ticket prices will continue to be determined by market forces, with government-imposed caps reserved for exceptional situations.
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Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: abplive.com
