There will be no cap on air ticket prices from August 31, and airlines will have flexibility in fixing the airfares.
However, experts said that high competition among the airlines may lead to benefits for fliers and many airlines may offer discounts as per the demands.
Aviation expert Harshvardhan said: “The move will give flexibility to the airlines in deciding air fares and airlines can charge as per their policies. Airfare cap was more towards the higher side. New airline has come and there is competition in the sector. To attract travelers, some airlines are likely to come up with offers.”
An industry source said that airlines will have freedom to decide on air ticket prices, according to the prevailing market situations. They may raise prices during festive season as higher fares will add to the margins, he said.
Earlier, the Civil Aviation Ministry had said that after review of the current status of Scheduled Domestic Operations vis-a-vis passenger demand for air travel, it has been decided to remove the fare bands notified from time to time regarding the airfares with effect from August 31.
The ministry had imposed lower and upper limits on airfares after the resumption of services in May 2020 following the initial two-month nationwide lockdown to contain the spread of Covid-19. Thereafter, the limits were relaxed in a phased manner according to the improvement in air traffic in the country.
The lower caps were meant as a relief for airlines struggling after the Covid-19 pandemic. At the same time, the upper caps on airfares were fixed to ensure that passengers do not have to pay a hefty amount for air travel.
Earlier, discussions on removing the fare bands for domestic airfares were held among the stakeholders including the government authorities and airlines. Carriers were of the view that removal of the pricing caps is required for the full-fledged recovery of domestic air traffic.