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Thursday, February 04, 2016

Capping airfares to push ticket prices higher: Min

The Indian Government has said that putting floors and caps on airfares will push the ticket prices higher as competition among airlines has kept the fares lower. Commenting on the issue, Union Minister Ashok Gajapathi Raju told the media, "Competition has kept the prices down and we should not discourage that. In our analysis, if we take a year of ticketing, 1.7 per cent of the ticketing (air tickets) were priced high. So if you go into floors and caps, we will be pushing up the cost of tickets to about 98 per cent and bringing it down for the rest. I don't think that is how policy is formulated. We would like to keep it (ticket prices) down and things to be passed on (to passengers)." "We have been requesting airlines to pass on the benefits of lower ATF prices. Airlines had a rough time till recently, so they have out done it. Their books are better and ATF has contributed to it... Price benefits need to be given to consumers," he added. According to the Minister, airlines should pass on the benefits of lower ATF prices to the flyers.