Flight ticket prices likely to fall – Here’s why

Airlines may start fare wars as govt removed lower caps on flight ticket prices

Hyderabad: Flight ticket prices are likely to fall as the aviation regulator Directorate General of Civil Aviation (DGCA) on Wednesday announced the removal of lower and upper limits on air fare from August 31.

The Ministry of Civil Aviation said, “After review of the current status of scheduled domestic operations viz-a-viz passenger demand for air travel, it has been decided to remove the fare bands notified from time to time regarding air fare with effect from 31.08.2022”

“The decision to remove air fare caps has been taken after careful analysis of daily demand and prices of air turbine fuel. Stabilisation has set in and we are certain that the sector is poised for growth in domestic traffic in the near future,” Civil Aviation Minister Jyotiraditya Scindia said in a tweet.

MS Education Academy

Reasons behind caps on flight ticket prices

In May 2020, the ministry imposed lower and upper limits on air fare after the resumption of services following the two-month nationwide lockdown.

The intention behind the lower caps was to provide relief for airlines struggling after the pandemic whereas, the upper caps were aimed to ensure that passengers do not have to pay a hefty amount for air travel.

Airlines likely to begin fare wars

As the lower caps will be removed on August 31, the flight ticket prices are expected to go down as airlines may start fare wars.

The timing of the decision is also likely to help airlines as the summer travel season has ended and the industry has entered into the lean season. During the lean season, airlines want to offer tickets at lower prices to attract air passengers, however, due to lower caps, they were unable to do so.

Passengers who book last-minute flight tickets are most likely to get them at lower prices.

However, there is another possibility too. The flight ticket prices on busy routes such as Mumbai, Delhi, and Bengaluru may increase as the government has removed upper caps too.

Back to top button