Domestic flights fare Cap: The upper and lower limits on domestic airfares will remain in place for another three months post-November 24, Civil Aviation Minister Hardeep Singh Puri said on Thursday. The ministry had on May 21 placed these limits through seven bands, classified on the basis of flight duration, till August 24. Later, it was extended till November 24.
Puri said if the scheduled domestic flights reach pre-COVID levels by the end of the year, he will have no hesitation in removing the fare limits at that time. “We are extending the price bands for another three months,” he said at a press conference.
“Even though we are extending it by three months, if by the time we reach the end of the year, and if we find that there is a very appreciable movement in the situation and we are reaching pre-COVID levels, I would absolutely have no hesitation if my colleagues (aviation ministry officials) want us to not utilize the price band for the full three months period,” Puri added.
Flights between cities that are under 40 minutes have been classified under section one, while those under 40-60 minutes are under section two. Section three consists of destinations 60-90 minutes apart by flight, section four comprises cities 90-120 minutes apart, section five consists of cities 120-150 minutes apart. Destinations between 150-180 minutes and 180-210 minutes have been classified under sections 6 and 7, respectively.
The base minimum airfare of domestic flights ranges from ₹2,000 to ₹6,500 and the maximum range from ₹6,000 to ₹18,600. Airlines have to make available 40% of total seats in an aircraft at less than the mid-point price between the highest and lowest fares, aviation secretary Pradeep Singh Kharola earlier said.
Puri earlier said the move will mean that the lowest fare between Delhi and Mumbai, the busiest route in the country, will be capped at ₹3,500 and ₹10,000 at the higher end.
While the upper price limit is aimed at preventing any sharp rise in fares due to pent-up demand, the lower limit will help ensure that the financial viability of airlines does not suffer amid high costs, Puri earlier said.
Bidding for Air India
Hardeep Singh Puri said bidding for Air India would be done on the basis of its enterprise value instead of equity value. Enterprise value of a company includes the equity value, debt as well as cash with the company. Equity value measures the value of a company’s shares. “We have decided to ask for bids for Air India on enterprise value,” Puri said.