High airfare in India: govt asks airlines to devise mechanism for reasonable pricing of air tickets

As airfares have been skyrocketing in the wake of Go First crisis, the government on Monday asked airlines to devise a mechanism to ensure reasonable airfares amid a surge in air ticket prices, particularly on certain routes that were earlier served by Go First.

In the case of the unfortunate Odisha tragedy, airlines have been advised to provide free carriage (cargo) services to the families of the deceased, the civil aviation ministry said.

During an hour-long meeting of the airlines advisory group, Civil Aviation Minister Jyotiraditya Scindia shared his concerns about the steep rise in airfares on certain routes.

Airlines have been asked to self-monitor airfares on routes that have seen a considerable rise in ticket prices, particularly those that were served by Go First earlier.

Go First stopped flying from May 3 and the reduction of capacity due to the crisis at the budget airline has come at a time when the peak domestic air travel period is round the corner.

A mechanism should be devised by airlines to ensure reasonable pricing within the high RBDs (Reservation Booking Designator) and the same would be monitored by the Directorate General of Civil Aviation (DGCA), the ministry said in a statement.

Airfares are deregulated under the current regulatory regime.

Besides, the ministry has said that during any calamity, airlines need to keep a tight check on the pricing of air tickets "in view of the humanitarian situation and monitor and control any surge in ticket prices to/ from that region".

After the deregulation of the country's airline sector, airfares are market-driven and are neither established nor regulated by the government. Airline pricing runs in multiple levels (buckets or Reservation Booking Designators).

Scindia, on March 16, informed the Lok Sabha that "airfares are neither established nor regulated by the government".

"The airline pricing system runs in multiple levels (buckets) which are in line with practices being followed globally. The prices are fixed by airlines keeping in mind the market, demand, seasonality and other market forces. The airfare increases with an increase in demand for seats as the lower fare buckets get sold out fast when bookings are offered by airlines," he had said in a written reply.

India is one of the fastest-growing civil aviation markets in the world and domestic passenger traffic has been rising after being significantly impacted by the coronavirus pandemic.

In April, domestic airlines flew 128.88 lakh passengers, as per the latest official data.

Crisis-hit Go First is undergoing a voluntary insolvency resolution process.