The Central Government of India has called upon airline companies to exercise caution when setting flight ticket prices, advocating for a balance between the maximum and minimum fares. This advisory comes as ticket prices have surged on some routes following the halt of operations by the budget airline GoFirst.
Volatility in Ticket Prices
After experiencing cash flow issues, GoFirst discontinued its flights from May 3rd, leading to a significant rise in airfares on routes where GoFirst had been operating. These routes include Delhi-Srinagar and Delhi-Pune. According to data from travel portal Ixigo, the average one-way fare on the Delhi-Leh route shot up by 125% to an average of Rs 13,674 during the period of May 3-10 compared to the April 20-28 period. Similarly, the average one-way fare on the Delhi-Srinagar route surged by 86% to Rs 16,898.
Government’s Stance on Ticket Pricing
Despite the sharp increase in fares, the government has clarified it has no plans to regulate the price of air tickets. A senior official from the Ministry of Civil Aviation stated anonymously that airlines have been encouraged to ‘exercise restraint’ and ‘maintain some kind of balance’ when determining ticket rates. They added that a situation with a vast discrepancy between the lowest and highest fares is not desirable.
The Indian Aviation Sector’s Post-COVID Revival
As the COVID-19 pandemic begins to ease, the Indian aviation sector is starting to recover. Official data from April 2023 shows that 128.88 lakh passengers traveled by air in India. The interruption of GoFirst’s services came just as the peak travel season was about to commence, with June typically being the busiest travel month. Airlines generally set ticket prices based on market dynamics, demand, weather conditions, and other factors. As demand for seats grows, airfares also rise.
Ongoing Crises in Airline Companies
Currently, several airline companies in India are grappling with various issues. GoFirst is undergoing a voluntary insolvency resolution process. Indigo has grounded numerous aircraft due to a dispute with engine manufacturer Pratt & Whitney, while SpiceJet is also confronting financial hurdles.