SpiceJet effect: Centre plans temporary cap on airfares

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New Delhi | Updated: Dec 24, 2014 10:42 AM

Government is planning to impose a temporary cap on airfares to limit soaring ticket prices affecting passengers.

Soaring ticket prices are affecting passengers already troubled by large number of flight cancellations by SpiceJet during the past month. (Reuters)Soaring ticket prices are affecting passengers already troubled by large number of flight cancellations by SpiceJet during the past month. (Reuters)

The government is planning to impose a temporary cap on airfares to limit the soaring ticket prices affecting passengers already troubled by the large number of flight cancellations by SpiceJet during the past month.

A senior official at the ministry of civil aviation said the cap has not been implemented yet. “But the government is planning to set an upper limit for the prices,” he added.

The official said the ministry had received a lot of complaints and requests from harried passengers who have had to cancel or change their travel plans at the last moment due to indiscriminate cancellations by the cash-strapped carrier.

Other airlines, meanwhile, are charging exorbitant fares from passengers for last minute bookings.

SpiceJet has been cutting capacity due to the financial crunch since July. While the airline operated 345 daily flights in July, it came down to 232 as on December 8. With cancellation of 70-80 flights a day throughout December, the airline has cancelled close to 2,000 flights in the month.

SpiceJet was also briefly forced to ground all its flights last week after suppliers refused to refuel planes for want of payments. The airline, which is under a debt of about Rs 1,600 crore as on December 5, has been in talks with various investors for a bailout. Ajay Singh, one of the original promoters of SpiceJet had met senior airline officials and civil aviation minister Ashok Gajapathy Raju last Thursday, expressing his interest in bailing the airline out.

The government, however, had said last week that the beleaguered airline would be put on “cash-and-carry” mode from December 31 if it was unable to show at least Rs 200 crore in its accounts.

Lat week, the Wadia Group-promoted budget carrier GoAir put 1.7 million seats up for sale, offering fares as low as Rs 1,469 for travel next year with a five-day booking period starting today, to stimulate demand during the lean period.

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