Airfares not regulated, airlines free to fix ‘reasonable prices’: Centre
Minister of state for civil aviation Gen. VK Singh (retd.) told the Rajya Sabha that fare bands with upper and lower limits were introduced by the Centre as a temporary measure due to the pandemic
Airfares are not regulated by the government and airlines are free to fix ‘reasonable tariffs’ taking into account relevant factors, such as cost of operation and reasonable profit among other things, the Centre informed the Rajya Sabha on Tuesday.
Responding to a query by Communist Party of India (Marxist) MP John Brittas, Minister of state (MoS) for civil aviation Gen. VK Singh (retd.) said that under The Aircraft Rules, 1937, airlines are free to fix “reasonable tariffs” based on the cost of operation, characteristics of services, reasonable profit and generally prevailing tariff. However, due to the pandemic, fare bands with upper and lower limits were introduced by the Centre as a temporary measure, the MoS added.
He further added that earlier also the fare bands have been revised from time to time in view of substantial price hikes in aviation turbine fuel (ATF) to keep the aviation sector “viable” while protecting the interests of the passengers as well. The government, however, does not intend to regulate airfares on international routes, Singh added.
Also Read | Scindia holds meetings with airline CEOs to ramp up safety oversight
Responding to a separate query in the Upper House, on Monday, Union minister for civil aviation Jyotiraditya Scindia said that “airfares are market-driven” and the fare capping orders are currently operational on a rolling basis of a 15-day cycle. He added that at the moment, there is no proposal to interfere with the existing regulatory framework.
The Opposition’s query came at a time when airfares are high due to the soaring fuel prices since the Ukraine-Russia war began in February.