Govt working on new ceiling & floor rates for domestic airfares

By: | Published: February 26, 2015 12:39 AM

The civil aviation ministry is working on fixing the floor and the ceiling rate for airfares in the domestic route.

The civil aviation ministry is working on fixing the floor and the ceiling rate for airfares in the domestic route.

A top ministry official told FE that the new airfare floor and ceiling rates will be based on different parameters like the type of airline, low-cost or full-service, the kind of aircraft the airline flies and sector specific besides the service they offer on airline.

The government is currently discussing the proposal with different stakeholders, including the airlines, that have largely resisted airfare caps in the domestic sector.

Though there is no timeline fixed for this, sources said it is likely to be in place before the start of the winter schedules for airlines this year which begins from October.

“As of now, what we understand is that airfares will depend on various factors like sectors, the kind of aircraft the airline flies and the kind of services they offer onboard. For each airline there will be a seperate cap. There will be no scope left for undercutting or overcharging fares. It will be a complex fare structure that would be simplified and systemised,” said an official.

Many members of Parliament (MPs) had written to the government late last year complaining about domestic carriers jacking up airfares especially last minute economy class fares. Airlines had pushed up fares soon after cash-strapped SpiceJet cancelled hundreds of its flights in December last year after oil marketing companies refused to supply fuel over non payment of dues.

It was then that for the first time the civil aviation ministry had internally discussed the possibility of having a floor and ceiling rates. Airlines taking advantage of the SpiceJet crisis raised spot fares by at least 40-50% in December which is the high-demand holiday season.

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