Government Examines Airfare Spike; Observes Increase In Business Class Fares—NDTV Profit Exclusive

After the review, a spike in prices was observed particularly in business class fares in domestic flights, the official told NDTV Profit. The other classes have not shown any concerning trends. However, the government will continue to monitor the fares closely to determine if any intervention is needed.

The findings also suggest that the price fluctuations have been observed in the Kerala-Gulf route. This can be traced back to the large volume of passengers travelling around Onam, the official said. "An influx of travelers moving to and from the Gulf has led to noticeable price increase. For international routes, which involve both foreign and Indian carriers, airfare regulation is entirely in their own hands."

The government has limited control over airfares, which are primarily driven by supply and demand. The airlines have the flexibility to set their fares based on operational needs, provided they adhere to existing norms.

Soon after taking charge in June, Union Civil Aviation Minister Ram Mohan Naidu had said that bringing down airfare is one of his top priorities.

The festive season typically sees a spike in travel demand, which often leads to higher ticket prices. While the ministry is monitoring the situation, Naidu indicated that it will not force airlines to maintain the same prices, advocating for a reasonable approach in setting fare prices as the industry also adapts to external pressures such as inflation. The Ministry though will ensure that passengers don't face undue inconvenience, he said.

The rise in fares is also believed to be occurring amid existing chaos in the aviation sector, with SpiceJet facing financial difficulties. The budget carrier's woes are further compounded by legal issues and aircraft groundings. It is currently seeking funds to address its various obligations.

In February, a parliamentary committee also proposed that the government should frame guidelines to control sudden surges in airfares, adding that “a route-specific fare ceiling can be examined".

India’s two biggest airlines — IndiGo, which has 63.3% market share and Tata Group airlines, which accounts for 28.5% — have hundreds of new planes on order, and the government is looking to increase the number of operational airports from 157 in 2024 to 350–400 by 2047 to cater to growing demand.

In financial year 2024, the total air passenger traffic in India reached 22 crore, a growth of 15.6% year-on-year, and is projected to reach 40 crore by FY29. Notably, airlines flew over 5 lakh domestic passengers across 3,173 domestic departures in a single day on November 17, for the first time ever.

After the review, a spike in prices was observed particularly in business class fares in domestic flights, the official told NDTV Profit. The other classes have not shown any concerning trends. However, the government will continue to monitor the fares closely to determine if any intervention is needed.

The findings also suggest that the price fluctuations have been observed in the Kerala-Gulf route. This can be traced back to the large volume of passengers travelling around Onam, the official said. "An influx of travelers moving to and from the Gulf has led to noticeable price increase. For international routes, which involve both foreign and Indian carriers, airfare regulation is entirely in their own hands."

The government has limited control over airfares, which are primarily driven by supply and demand. The airlines have the flexibility to set their fares based on operational needs, provided they adhere to existing norms.

Soon after taking charge in June, Union Civil Aviation Minister Ram Mohan Naidu had said that bringing down airfare is one of his top priorities.

The festive season typically sees a spike in travel demand, which often leads to higher ticket prices. While the ministry is monitoring the situation, Naidu indicated that it will not force airlines to maintain the same prices, advocating for a reasonable approach in setting fare prices as the industry also adapts to external pressures such as inflation. The Ministry though will ensure that passengers don't face undue inconvenience, he said.

The rise in fares is also believed to be occurring amid existing chaos in the aviation sector, with SpiceJet facing financial difficulties. The budget carrier's woes are further compounded by legal issues and aircraft groundings. It is currently seeking funds to address its various obligations.

In February, a parliamentary committee also proposed that the government should frame guidelines to control sudden surges in airfares, adding that “a route-specific fare ceiling can be examined".

India’s two biggest airlines — IndiGo, which has 63.3% market share and Tata Group airlines, which accounts for 28.5% — have hundreds of new planes on order, and the government is looking to increase the number of operational airports from 157 in 2024 to 350–400 by 2047 to cater to growing demand.

In financial year 2024, the total air passenger traffic in India reached 22 crore, a growth of 15.6% year-on-year, and is projected to reach 40 crore by FY29. Notably, airlines flew over 5 lakh domestic passengers across 3,173 domestic departures in a single day on November 17, for the first time ever.