Arguing that competition among airlines will take care of the problem, Civil Aviation Minister Ashok Gajapathi Raju says curbing airfares could jeopardise the govt’s regional connectivity plan

New Delhi : Capping of airfares in the backdrop of passenger complaints of arbitrary tariff hikes was ruled out by the government which said that competition among the airlines will take care of the problem. Civil Aviation Minister Ashok Gajapathi Raju said restricting the airfares will not make good business sense as it could also jeopardise the government’s regional connectivity plan as such a move may discourage airlines to fly on non-profitable routes.

He, however, said a slew of passenger-centric measures including “time-bound” grievance redressal mechanism would be unveiled very soon, emphasising that India’s civil aviation market was the fastest growing in domestic passenger travel demand.

The government is likely to announce steps to rationalise ticket cancellation charges and they are likely to be capped around the base fare, as against current exorbitant fees, as part of passenger-friendly initiatives.

The Minister said at least 32 airports built by Airport Authority of India at a cost of at least Rs 3,000 crore over the years were lying “unconnected” and putting any restriction on market-driven fares may jeopardize government’s plan to start flight services to those airports.

His comments come at a time when the government is discussing ways to address issues related to steep fluctuations in airfares, especially during peak seasons and natural calamities.

“These (capping airfares) are complicated problems. They don’t have simplistic solutions…. Competition has by and large taken care of the (ticket) rates,” Raju told PTI in an interview.

“Floors and caps go together. If you just say I will only cap (air ticket prices) then you won’t have any airline. Anyone doing business doesn’t want to make loss,” he said. India’s domestic aviation market has clocked a growth rate of 22 per cent in the last one year, the highest for any country.

Raju said his Ministry has taken up the issue of high tax levied on jet fuel by most of the state governments with the chief ministers concerned.

The draft civil aviation policy has proposed a limit of Rs 2,500 per ticket for a one-hour flight as part of larger efforts to boost regional air connectivity.

Raju meets Jaitley

Civil Aviation Minister Ashok Gajapathi Raju also met Finance Minister Arun Jaitley and deliberated on various issues concerning the aviation sector, amid the talks of Union Cabinet expected  to take up the draft aviation policy for approval soon. “Had a very useful discussion with Sh. @arunjaitley today on strengthening the aviation sector,” Raju tweeted after his meeting.

The proposed policy contains several provisions like 2 per cent levy on all air tickets to fund regional connectivity and tax sops, among others, which would have financial implications when  it comes for implementation.

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