New Delhi, 28 March 2022: Air fares are not regulated by the Governments. Under the provision of Sub Rule (1) of Rule 135, aircraft Rules 1937, airlines are free to fix reasonable tariff having regard to all relevant factors, including the cost of operation, characteristics of service, reasonable profit and the generally prevailing tariff. Air fare so established by the airlines is published on their respective website under the provision of Sub Rule (2) of Rule 135, Aircraft Rules 1937.
In order to prevent excessive charging and sudden surges in airfares and to promote transparency by scheduled domestic airlines, Directorate General of Civil Aviation (DGCA) has issued Air Transport Circular 02 of 2010 wherein airlines are required to display on their respective websites the tariff sheet route-wise across their network in various fare categories and the manner it is offered in the market.
DGCA has a Tariff Monitoring Unit that monitors airfares on certain routes on monthly basis to ensure that the airlines do not charge airfares outside a range declared by them.
During the last two years, the COVID-19 pandemic has adversely impacted the revenue streams of businesses including aviation sector. Under normal circumstances, airfares are neither established nor regulated by the Government. However, due to the unprecedented circumstances, fare bands with upper and lower limits were introduced by the Government as a special measure. The fare bands serve the dual purpose of protecting the interests of the travelers as well as of the airlines.
The fare bands were revised from time to time in view of the substantial hike in price of Aviation Turbine Fuel(ATF) in order to keep the aviation sector viable while protecting the interests of the passengers. Presently, fare capping is applicable on a rolling basis for a 15 days’ cycle. The Government regularly reviews the situation. Further, decisions regarding the domestic scheduled operations and relaxation in fare capping is subject to prevailing COVID-19 situation, status of operations and passenger demand for air travel.
This information was given by the Minister of State in the Ministry of Civil Aviation Gen. (Dr) V. K. Singh (Retd) in a written reply to a question in Rajya Sabha today.