Big change in flight ticket pricing from Aug 31! Here's what it means for fliers

From Wednesday, the Ministry of Civil Aviation will remove price caps on domestic airfares, which will be the last Covid-related operational restrictions on domestic air travel. This would mean that from August 31 the fares will be regulated by the market, where airline operators are expected to offer competitive prices. 

Earlier this month, the Civil Aviation ministry in its order said that the decision to roll back the price caps has been taken after analysing the present state of affairs.   

The airlines have been pressurising the government to roll back the price bands for a while as they claimed that the caps were restricting them from recovering fully after the pandemic slump.  On its part, the government had said these caps were necessary to safeguard the passengers from paying a whopping amount.

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In May, Union Aviation Minister Jyotiraditya Scindia said that high ATF prices and other domestic factors have promoted his government to continue with price caps.  

Why were the caps introduced? 

The caps were first introduced in May 2020, when the domestic operations kickstarted after a gap of two months. The government, based on flight durations, had floated seven bands for domestic economy class travel. The idea was to prevent a fare war and also protect the passengers.  

The band ranged from flights of up to 40 minutes to flights of 180-210 minutes. As per the rules, the airfare could not go below Rs 2,900 (excluding GST) or exceed Rs 8,800 (excluding GST) for a flight less than 40 minutes. This rule was even applicable for major trunk routes. While the upper band was floated to protect passengers from high fares, the lower band was to support the financially weak airlines. Later, the ministry relaxed the fare restrictions on a 15-day rolling cycle. 

Also read: India@100 : Airline passengers to overtake Railways' airconditioned travellers in next 7 years, says Scindia

Airfares from August 31 

The cap removal will help carriers attract customers with competitive prices ahead of the festive season. After the bands are removed, all traditional factors, such as demand and supply, competition, and airline monopoly, will come into play, which will decide how much a ticket will cost.  

From now on, the airlines can offer discounts on certain routes, which was not allowed because of the lower and upper caps. Travellers can expect competitive prices on some routes, although, for monopoly routes, the carriers will continue to charge higher prices. The prices are also expected to be high on major trunk routes, such as Mumbai-Delhi and Delhi-Bengaluru. 

Besides, flights could get cheaper now if booked at the last minute, sector experts have said.