Domestic airfare caps removed from today after two years; what this means for passengers

The decision of the government to remove lower and upper limit price caps on domestic airfares after almost two years comes into effect from August 31. The airfare caps were imposed back in May 2020 in view of the outbreak of the COVID-19 pandemic.

Earlier this month, Union Minister for Civil Aviation Jyotiraditya Scindia had tweeted, ''The decision to remove airfare caps has been taken after careful analysis of daily demand and prices of air turbine fuel (ATF). Stabilization has set in and we are certain that the sector is poised for growth in domestic traffic shortly."

The Civil Aviation Ministry had imposed lower and upper limits on domestic airfares based on flight duration when services were resumed on May 25, 2020, after a two-month lockdown due to the COVID-19 pandemic. At that time, airlines were instructed to not charge a passenger less than Rs 2,900 (excluding GST) and more than Rs 8,800 (excluding GST) for domestic flights of less than 40 minutes.

The lower end of the fare band was put in place to help airlines that had been struggling financially due to travel restrictions. The upper limit was imposed so that passengers are not charged huge amounts when the demand for seats is high.