Aviation: Good news for flyers, panel says link airfares to inflation as tariffs soar

Much to flyers relief, surging airfares problem is now being considered at the highest levels even though a solution may be far off as yet. Due to persisting concerns over steep fluctuations in air ticket prices during festival seasons and calamities, some of the members of a Parliamentary panel have suggested the government to consider linking airfares with inflation instead of dynamic pricing system and also cap the ticket prices, said a PTI report citing sources. 
 
Members recommended that airfares should be linked with inflation, rather than the prices being determined on the basis of demand, a source present at the meeting on Wednesday said. Some members of the Parliamentary Standing Committee on Transport, Tourism and Culture during a meeting with senior officials of the Civil Aviation Ministry suggested this solution yesterday, reports PTI. 
 
The source reportedly said that few members also suggested that ticket prices could be linked with that of Aviation Turbine Fuel (ATF), and also expressed that there should be maximum and minimum limits on airfares on all routes. 
 
Notably, ATF accounts for a substantial chunk of the operational expenses incurred by airlines, as the recent crude oil rising prices have adversely been impacting the profitability of the carriers.
 
Some members flagged concerns about rise in air ticket prices during the recent Kerala floods, the source said, adding that they also sought a new set of guidelines to ensure that airfares remain as low as possible during the time of a crisis or natural calamity.
 
Aviation regulator DGCA had closely monitored airfare movements for flights connecting flood-hit Kerala, while the Civil Aviation Ministry has reportedly been maintaining that air ticket prices are based on demand and that the regulator does not have any role in fixing the fares.
 
While the government is aiming to make flying more affordable for common man, the ticket prices rise with demand, the source reportedly said, adding it is contradictory and unfair. This model of demand-driven air ticket pricing should be done away with, the source told PTI.
 
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Earlier on August 20, Civil Aviation Minister Suresh Prabhu reportedly said the DGCA was monitoring ticket prices for flights connecting flood-hit Kerala. He, however, clarified that it should not be seen by airlines as micro-management by the government as it was a unique situation of "humanitarian crisis".