Should air fares be regulated on international routes? Government responds

The existing domestic airfare bands are revised from time to time in view of high ATF prices but the government does not intend to regulate airfares on international routes, according to Union minister V K Singh.

While airfares are not regulated by the government, fare bands have been introduced as a temporary measure in the wake of the coronavirus pandemic, which had significantly impacted the aviation sector.

In a written reply in the Rajya Sabha, Singh, who is the Minister of State for Civil Aviation, said airfares are neither established nor regulated by the government.

The minister said the government does not intend to regulate airfares on international routes.

He was responding to a query on whether the government would take steps for fixing upper ceiling for airfares in all domestic and international routes.

According to Singh, due to the unprecedented circumstances prevailing in the wake of the pandemic, fare bands with upper and lower limits were introduced by the government under Section 8B of the Aircraft Act, 1934 as a temporary measure.

"The fare bands have been revised from time to time in view of substantial hike in price of Aviation Turbine Fuel (ATF) in order to keep the aviation sector viable while protecting the interests of the passengers.

"Fare capping is, presently, applicable on a rolling basis for a 15 days cycle," he said in response to queries by member John Brittas.

In recent times, there has been a spike in ATF prices resulting in increased operational expenses for airlines.

Last month, the prices had peaked to Rs 141,232.87 per kl (Rs 141.23 per litre).

However, on July 16, ATF prices were cut by 2.2 per cent, reflecting a fall in international oil rates. The prices were reduced by Rs 3,084.94 per kilolitre, or 2.2 per cent, to Rs 138,147.93 per kl.