The country’s biggest carrier IndiGo on Wednesday said the deportation of airfare caps will help airlines to boost their passenger load factors by offering discounted fares.
With the government creating airfare limits after more than two years, travel agents are likely to be positive that ticket prices are likely to go down in the upcoming months, mostly due to the upcoming festival season.
India’s second-largest airline Vistara reported that it will continue to go on with a balanced pricing strategy.
The highest and lowest limits on airfares based on flight timings were put in place back in May 2020 after the restart of the scheduled domestic air services. Planned domestic flights were appended for two months starting from late March 2020 in the wake of the coronavirus pandemic.
On August 10, the civil aviation ministry notified that airfare caps will be detached from August 31 amid the domestic air traffic being on the recovery path as well as a comparative decrease in jet fuel prices.
IndiGo’s spokesperson said the government’s decision to remove airfare caps is a welcome move and will allow airlines to follow dynamic pricing on airfares.
“It will also help airlines increase their passenger load factor by offering discounted fares on respective sectors, offering affordable fares. Overall, this will help airlines sustain with better PLFs (Passenger Load Factors) and benefit consumers as airlines will be able to offer affordable fares,” the spokesperson told PTI.
Regarding the removal of airfare caps, Travel Agents Association of India (TAAI) President Jyoti Mayal said those in the travel trade expect the airfares to go down in the coming months, especially because the festive season is coming, which means more people traveling.
“India is a huge market and with the continuous development of aviation infrastructure, existing airlines expanding their fleets, and newer/ older ones coming into the business, we hope to see a rise in the competition eventually leading to getting the end user benefitted,” she told PTI
A Vistara spokesperson said that in a free market scenario, airfares are an outcome of a multitude of factors, such as the dynamics of demand and supply, the operational environment, seasonality, cost, competition, market sentiment, and taxation.
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