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Airlines allowed to increase fares as fuel costs rise

Airlines allowed to increase fares as fuel costs rise

The government has raised the cap on maximum fares chargeable by airlines on longer flights to Rs 13,000 from Rs 10,000 earlier. In the case of shorter flights of 90 to 120 minutes duration, the cap has been raised to Rs 3,900, up from Rs 3,500 earlier.

The fare caps for airlines were raised on Thursday to offset rising fuel prices which have increased the cost of operations.  However, the government has extended the imposition of upper limits on airfares till 31 March.

Passenger fares will now rise between 10% and 30% , depending on the duration of the flight, the civil aviation ministry said in an order.

For short-haul flights with a duration of less than 40 minutes, the minimum fares have been raised to ₹2,200 from ₹2,000. The maximum fare that an airline can charge in these routes has been increased to ₹7,800 from ₹6,000, the ministry said.

There are six other bands with separate minimum or maximum fares.

The maximum and minimum limits caps were introduced to prevent price gouging by airlines during a crisis and also to prevent them from undercutting rivals amid a sharp decline in passengers during the pandemic.