Even as Indian airlines had yet again hiked airfares late last month in order to pass on the rise in fuel prices to consumers, the Centre has no proposal at present to interfere with the existing regulatory framework on airfares. The price hike in late June was the third in the last four months for the world’s fastest-growing aviation market.

Stating that “airfares are market-driven”, Union Civil Aviation Minister Jyotiraditya M Scindia said that the freedom of deciding on reasonable tariffs lies with the airlines. “Airfares are market-driven and are neither regulated nor established by the government and airlines are free to fix reasonable tariffs based on the cost of operation, characteristics of services and reasonable profit,” Scindia explained on Tuesday in a written response to a lawmaker’s question in the Upper House of Parliament.

He added that the Centre had notified fare bands for economy tickets for the scheduled domestic sector to ensure that the airlines do not charge excessive fares as an extraordinary measure during the Covid-19 pandemic.

Scindia further stated that the fare bands have been revised from time to time in view of substantial hike in the price of aviation turbine fuel to keep the aviation sector viable while protecting the interests of the passengers.

It may be noted that Jet fuel prices were reduced by 2.2 per cent by the oil marketing companies (OMCs) on Saturday, in line with correction in Brent prices.

The aviation minister informed the Parliament that the fare-capping orders are presently in operation on a rolling basis of 15 days cycle adding that the government has no plans not regulate airfares on international flying routes.

Indian carriers are expecting that aviation turbine fuel (ATF) be brought under the purview of the Goods and Service Tax (GST) so as to reduce the tax burden.