The government had imposed a cap on airfares for more than two years amid the COVID-19 pandemic. But this arrangement has been abolished from last August 31. The decision was taken due to the gradual improvement in domestic air passenger traffic.
According to industry people, the average booking price of air tickets has not changed much, but some areas are witnessing a reduction in fares. At the same time, growth has also been seen in some other areas.
The country’s largest airline IndiGo said the removal of airfare cap will provide an opportunity to offer dynamic pricing. The company said that there has been a steady increase in the number of passengers in the last 5-6 months. The airline did not comment on the removal of the fare limit.
Thomas Cook (India) and SOTC Travel President and Group Head Indivar Rastogi said that by removing the airfare cap, airlines are passing on the benefit of lower prices to customers on areas/routes where passenger numbers are less.
He said that this is being seen for areas like Amritsar, Lucknow, Dehradun, Surat, Nagpur and Pune, there has been a drop of 8-10 per cent in fares after the removal of the fare cap.
Rastogi said that on the other hand the fare has increased for various routes like Mumbai, Pune, Delhi, Bengaluru.
Kartik Prabhu, head of strategy, Cleartrip, said it is too early to draw any conclusions on the removal of airfares cap.
He said a comparison of the first 15 days of August and September indicated that there were 23 per cent more bookings in September as compared to August. Interestingly, the average booking price has not changed much, he added.
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