The government on Monday said it generally refrains from regulating airfares to maintain market competitiveness but remains vigilant and intervenes to shift capacity from one sector to another to prevent exorbitant pricing. Amid concerns in certain quarters that air ticket prices are on the rise and there is a need to make them more affordable, Minister of State for Civil Aviation Murlidhar Mohol told the Rajya Sabha that airfares have moderated in 2024, relative to 2023.
“With the enhancement of capacity by induction of more aircraft fleet, modernisation of airports and development of new airports, domestic passenger traffic has increased to 153,674,310 in 2023-24 as compared to 136,028,656 in the year 2022-23.
“Even in the current financial year 2024-25, as of October, domestic passenger traffic has reached 93,002,510, surpassing the corresponding figure of 87,995,187 for the fiscal year 2023-24, thereby reflecting an impressive growth rate of 5.7 per cent,” Mohol said in a written reply.
Responding to queries from CPI-M member from Kerala John Brittas, the minister also said that given the complex dynamics of the Indian aviation industry, the government is playing the role of a facilitator by way of creating enabling environment to support the growth of the sector.
“Airfares are not subject to regulation by the government and airlines have the flexibility to determine their airfares based on their operational needs, while adhering to Rule 135 of the Aircraft Rules, 1937.
According to the Airports Council International (ACI Asia-Pacific), India has recorded the highest surge in airfares among other countries in the Asia Pacific and Middle East regions. The rise in airfares in India, which stands at 41 per cent, has raised concerns about the long-term recovery of the civil aviation industry.
“While the government generally refrains from regulating airfares to maintain market competitiveness, however, it remains vigilant, and the government intervenes to shift capacity from one sector to another to prevent exorbitant pricing to ensure passenger comfort and welfare,” the minister said. According to him, airlines have been sensitised to ensure reasonability while fixing the airfares and to keep passengers’ interests in mind, and notably, during festival seasons, a decrease in airfares was observed in various sectors.
The Directorate General of Civil Aviation (DGCA) has a Tariff Monitoring Unit (TMU) to check on predatory/excessive pricing by airlines.
The minister also said that airlines ticket prices are determined by the demand and supply theory and are governed under the competition laws (Competition Act, 2002). Anti-competitive practices are kept in check by the Competition Commission of India (CCI).
