The Ministry of Civil Aviation (MoCA) has increased the airfares by 35% in a month. While the reason for increasing the first hike (of 30%) was not revealed, MoCA has attributed the second hike (of an additional 5%) to an increase in aircraft turbine fuel price.
On March 21, aviation minister Hardeep Puri said that India has brought back 6.76 million stranded passengers with the help of the special Vande Bharat Mission (VBM) international flights since last May. According to the government, over 8,500 distressed Indians returned to the country on March 20 alone.
Experts have said that though the hike is a good step for airlines, it might not go well with passengers. On contrary to the aviation minister’s claims, experts also said that the demand for air travel has not been good, and with the 35% hike, the demand might get affected further.
Rajji Rai, chairman of Swift group of industries, said, “This is a steep increase on the lower limit of the airfare band from a passenger’s point of view. The ministry should have increased the lower limit of the airfare band at regular intervals. But because the government suddenly increased it by 30%, it hasn’t gone well with the passengers. Airlines have pushed their way through because they are finding it difficult to survive, but as an authority, the ministry should have increased the prices in parts instead of increasing it by 35% within a month.”
CS Subbiah, former chief executive officer (CEO) of Alliance Air, said, “According to me, the ministry has taken a cautious call by increasing the lower limit of the band. The government has to allow the airlines to operate on their own. It has been nine months that the airspace has reopened after complete lockdown. Though everyone has suffered losses, the airlines have suffered more, and are financially weak. The government seems to be slowly moving towards deregulation, and increasing the airfares needed as per the market conditions. As long as maximum fares are not increased, increasing the lower limit of the band is not an issue, as it also gives confidence to airlines to run their business.”
{{/usCountry}}CS Subbiah, former chief executive officer (CEO) of Alliance Air, said, “According to me, the ministry has taken a cautious call by increasing the lower limit of the band. The government has to allow the airlines to operate on their own. It has been nine months that the airspace has reopened after complete lockdown. Though everyone has suffered losses, the airlines have suffered more, and are financially weak. The government seems to be slowly moving towards deregulation, and increasing the airfares needed as per the market conditions. As long as maximum fares are not increased, increasing the lower limit of the band is not an issue, as it also gives confidence to airlines to run their business.”
{{/usCountry}}Commenting on continuing with the 80% flight capacity restrictions by the ministry, Subbiah said, “Flights are still not seeing full loads, hence the government might wait till the summer vacation to see the response. Even if the air traffic reaches 70% of that recorded in 2019, then they might slowly increase the flight capacity to 100%.”
According to aviation expert Vipul Saxena the increase in Covid-19 cases as well as with more states making a test report compulsory for travel, the passenger traffic will be affected.
“People will travel only in unavoidable situations. I see heavy fall in numbers till June. The increase in minimum fare cap will further impact passenger traffic. However, I am hopeful of an airfare war due to poor demand,” said Saxena.
Thane resident Savita Yadav believes that with the air tickets getting costlier and states imposing more restrictions amid the rise in Covid-19 cases, the situation is too volatile to plan a travel.
“A Mumbai-Dehradun roundtrip ticket for May 14 starts from ₹12,000. The rates for the sector in February first week were around ₹ 9,000.But I did not book my tickets then, as making travel plans in advance is risky these days. However, now the air tickets are costlier and the situation is too volatile,” said Yadav.