The Civil Aviation Ministry has decided to increase minimum air fares by five per cent. This is mainly due to the rising COVID-19 cases in the country which led to decline in passenger numbers in addition to rise in aviation turbine fuel (ATF) prices. The ministry also added that it will continue with the existing 80 per cent cap on capacity.
Civil aviation minister Hardeep Singh Puri took to the microblogging site to share the details. He tweeted, “Last few days have seen a decline in the number of air passengers largely due to restrictions and imposition of compulsory RT-PCR test by various states. Due to this we have decided to retain the permissible (capacity) limit to 80 percent of the schedule."
He also stated there has been a continuous rise in the price of ATF so it has been decided to increase the lower fare band by 5 percent keeping the upper fare band unchanged.
India's domestic air traffic fell 37 per cent year-on-year to 78 lakh passengers in February amid travel curbs and capacity restrictions due to the pandemic, according to Icra. Meanwhile, the Credit rating agency ICRA stated that in the fiscal 2021, India’s airlines’ losses totalled Rs 21,000 crore and the airports accumulated losses of Rs 5,400 crore. This has led to job losses as well.
According to a Crisil report, Indian airlines are staring at a massive Rs 1.1-1.3 lakh crore revenue forgone over fiscals 2020 to 2022 due to pandemic.