The Directorate General of Civil Aviation (DGCA) on Friday extended the mandatory air fare band by three more months until November 24.
The minimum and maximum airfares an airline can levy on a given route were enforced by the Ministry of Civil Aviation in the days leading up to the re-opening of domestic flights on May 25. Airlines and industry experts had reluctantly accepted this as a temporary measure, but had vehemently opposed its extension beyond August 24.
Various airlines have said that they would like to offer fares lower than the minima prescribed by the government to boost demand for travel. But the government says that it aims to help passengers by ensuring airlines do not overprice their tickets as well as to help airlines from predatory pricing, that is, airlines with better liquidity pricing tickets so low that it will drain out competition from those who are not financially strong and can’t match their fares.
In a separate order, the government also said that its instructions to airlines to not deploy more than 45% of aircraft will be in force until November 24. However, as the demand for travel remains weak, airlines say this is not a cause for worry and they are only able to deploy less than 30% of their aircraft. Despite only a fraction of the total planes being operated, airlines are unable to sell more than 50%-60% seats on them. The number of passenger trips in June were a mere 15% of the same period last year.
