Air Fares Burning A Hole In Your Pocket? India's New Aviation Minister Wants To Change That

India’s newly appointed aviation minister, Ram Mohan Naidu, has reportedly said he intends to make air travel more affordable by addressing the issue of rising fares, amid rapid growth in the aviation sector and record new plane orders by carriers.

What’s The Problem? Spot airfares on certain routes have surged in recent times, with prices rising between 8% and 30%, according to data from travel portals. Yatra Online reports a 20-25% increase across key routes, while ixigo highlights jumps ranging from 8% to 39%.

Most experts have blamed Tata-owned Vistara’s decision to reduce flights by 10% — scaling back operations by around 25-30 flights per day — for the spike in air fares.

Long-Term Issues: Industry experts foresee potential long-term implications of the current scenario, highlighting that that Vistara’s flight cancellations could lead to a fare increase of at least 25% during the summer rush, with possible effects extending into June and July, coinciding with student international travel.

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India, recognised as the world’s fastest-growing aviation market, also faces challenges such as global supply chain disruptions which delay plane deliveries and contribute to higher airfares.

In February, an Indian parliamentary panel suggested that the government should develop guidelines to control sudden fare increases, even proposing the examination of a route-specific fare ceiling. However, airlines attribute fare hikes to supply and demand dynamics.

Intent: “The prices of tickets have risen for whatever reason … I really want to delve into this issue (and) how to make them a little more accessible, available for the people of this country,” Naidu said. He told ET Now that he had made plans for a “special meeting” at the ministry to explore solutions, though he did not provide further details.

India’s two largest airlines, IndiGo and Tata Group airlines, which together hold approximately 90% of the market share, have placed substantial orders for new planes. The government is also expanding airport infrastructure to accommodate the increasing demand.

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Posted In: GovernmentNewsRegulationsRetail SalesRam Mohan Naidu