Domestic Airfares: Here’s What Fliers Need To Know

The central government’s move to remove the domestic airfares price cap from August 31 will impact airfare this festive season. 

After almost two years, this price cap is getting removed and will again give flexibility to domestic airlines in deciding passenger fares.

Will the domestic airfares come down?

Now, with no price caps, the airlines can charge passengers based on the market forces of supply and demand and can offer heavy discounts when there’s less occupancy. 

Earlier, this was not possible for the airlines because of the caps imposed by the central government. 

Now, this may result in lower fares in the off-season and higher domestic airfares during the time of high occupancy.

Here’s why these price caps are getting removed by the aviation ministry.

The aviation ministry decided to remove airfare caps after an analysis of passenger demand and prices of air turbine fuel (ATF). Also, they analyzed the growth in domestic air travel, and to boost this, a step has been taken.

Why did the lower and upper caps were imposed by the government on domestic airfares?

The aviation ministry imposed the lower and upper price caps on airfares in May 2020 once domestic aviation operations resumed post-lockdown. 

The lower caps helped in the protection of financially weak airlines while the upper price caps were imposed to protect passengers from high fares charged by the airlines.