India to lift restrictions on ticket fare prices from Aug. 31 (updated)

Jet Airways (India)

10/08/2022 12:20

(Adds details, context)
    By Aditi Shah
    NEW DELHI, Aug 10 (Reuters) - India will remove the fare
caps it imposed on domestic airlines in 2020 during the COVID-19
pandemic from Aug. 31, the country's civil aviation ministry
said on Wednesday, lifting restrictions on ticket prices. 
    The government, in a rare move, had regulated fares by
imposing a minimum and maximum band based on the flight's
duration to prevent ticket prices from spiking due to pent-up
demand arising from restrictions on air travel easing.
    The decision will bring relief to airlines including IndiGo
 INGL.NS , SpiceJet Ltd  SPJT.NS , Air India, and Vistara - a
joint venture between the Tata Group and Singapore Airlines
 SIAL.SI  - as well as new entrant Akasa Air, allowing them to
price tickets freely.
    India is seeing a strong rebound in domestic air travel,
with passenger numbers touching pre-COVID levels, boosting
airlines' revenues. However, high fuel prices are eating away at
their profitability. 
    The fare caps were imposed by the government when it lifted
restrictions on air travel in May 2020, after two months of
grounding all planes to curb the virus' spread. 
    At the time it said https://reut.rs/3SJpPUO that for a
two-hour flight between the cities of Mumbai and Delhi, airlines
would be allowed to charge a minimum fare of 3,500 rupees ($44)
and a maximum of 10,000 rupees ($126), while ensuring that 40%
of the tickets sold were priced below the median value.
    ($1 = 79.4900 Indian rupees)

 (Reporting by Aditi Shah; Editing by Louise Heavens and Jan
Harvey)
 ((aditi.shah@tr.com; +91-11-4954 8023, +91-11-3015 8023;
Reuters Messaging: twitter: @aditishahsays))