India Is Trying to Make Air Travel Affordable, But How?
31.07.2024 - 09:28
/ skift.com
/ Thomas Cook
/ Bulbul Dhawan
The Indian government has advised airlines to self-regulate and exercise moderation in pricing air tickets, the civil aviation ministry has said. The move has come amid concerns over high airfares, especially during peak periods and festivals.
Indian minister of state for civil aviation Murlidhar Mohol said that the ministry held consultations with the airline representatives and advised them to keep the interest of passengers in mind when fixing the prices. “The airlines have committed to ensure that airfares do not surge during events such as natural disasters, calamities, etc,” he said.
Civil aviation minister Kinjarapu Rammohan Naidu also promised to probe hikes in airfares.
Soon after taking the post as the new civil aviation minister, Naidu had said that he intended to make air travel affordable, and was working on strategy to keep airfares in check. But Naidu might have face some difficulty in achieving his goals.
Monitoring Airfares in India: India deregulated the aviation sector in 1994, and since then, it neither establishes nor regulates the airfares. Mohol said that the sector was deregulated in most countries of the world. “Deregulation has led to increased competition between airline carriers, leading to decrease in airfare. As a result of deregulation, entry into the airline industry for a potential new airline has become easier,” he said.
The minister further added that the ability of lower income groups in India to travel by air was a direct result of deregulation.
For airfare monitoring in India, civil aviation watchdog Directorate General of Civil Aviation (DGCA) has set up a Tariff Monitoring Unit (TMU) to monitor airfares on select domestic routes on a random basis to ensure that airlines do not charge airfares outside the range declared by them.
Last year also, representatives of private airlines in the country were called by a committee of the parliament that was looking at the matter of exorbitant airfares. The committee had also advised the civil aviation ministry to cap upper and lower levels of airfares to prevent predatory pricing mechanisms by airlines. The issue, however, still persists more than a year later.
Why This Issue Matters: India is one the fastest growing aviation markets, and its domestic aviation market is the third-largest in the world. Over the past decade, the Indian domestic market grew at an annual rate of 6.9%, according to data by aviation analytics firm OAG.
The low-cost carrier segment accounted for more than 78% of the domestic airline capacity in India in the month of April this year. According to OAG, “The LCC sector has been key to driving growth in India’s domestic market. In the last 10 years IndiGo has almost doubled their market share,