Discover how the Indian government plans to manage festive season airfares, advising airlines on reasonable pricing amidst rising Aviation Turbine Fuel costs driven by global crises.
Key Points
- The government will not impose a cap on airfares for the upcoming festive season.
- Airlines will be advised to keep prices reasonable during the festive period to benefit travellers.
- Operating costs for aviation companies have risen significantly due to higher fuel costs.
- The ongoing West Asia crisis is a contributing factor to the increase in Aviation Turbine Fuel (ATF) prices.
- ATF accounts for 40-43% of airfares, making ticket prices highly sensitive to fuel cost fluctuations.
The government will not cap airfares for the upcoming festive season but will advise airlines to keep the prices reasonable, Civil Aviation Minister K Rammohan Naidu said on Tuesday, even as he mentioned that operating costs for aviation companies have risen due to higher fuel costs.
Understanding Airfare Dynamics
Talking to reporters on the sidelines of signing pacts for the next phase of Udaan, the minister said that in the past also, the government has handled the price situation in terms of festivals or important events.
"We engage with the airlines continuously; we also have regular meetings with them. And we definitely point it to them that during this festive season, you have to ensure that the fair prices are kept at a reasonable level so that the people who want to travel, especially in these important times, get to see the benefit," the minister said.
He was responding to a question if government would impose a cap on airfares during the forthcoming festive season.
He further said that the ongoing West Asia crisis has driven the ATF prices forward.
Fuel accounts for a massive portion of an airline's operating expense structure.
"This is not necessarily because of the festive season or anything, but there is an ongoing crisis situation," he said.
Naidu said ATF makes up 40 to 43 per cent of airfares and even a small rise in fuel costs directly pushes up ticket prices.
