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India to lift restrictions on ticket fare prices from August 31

The cap on airfares was imposed by the ministry on May 21, 2020



The fare caps were imposed by the government when it lifted restrictions on air travel in May 2020, after two months of grounding all planes to curb the virus' spread.
Image Credit: Shutterstock

New Delhi: India will remove the fare caps it imposed on domestic airlines in 2020 during the COVID-19 pandemic from August 31, the country's civil aviation ministry said on Wednesday, lifting restrictions on ticket prices.

The government, in a rare move, had regulated fares by imposing a minimum and maximum band based on the flight's duration to prevent ticket prices from spiking due to pent-up demand arising from restrictions on air travel easing.

The decision will bring relief to airlines including IndiGo, SpiceJet, Air India, and Vistara as well as new entrant Akasa Air, allowing them to price tickets freely.

Strong rebound

India is seeing a strong rebound in domestic air travel, with passenger numbers touching pre-COVID levels, boosting airlines' revenues. However, high fuel prices are eating away at their profitability.

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The fare caps were imposed by the government when it lifted restrictions on air travel in May 2020, after two months of grounding all planes to curb the virus' spread.

At the time it said that for a two-hour flight between the cities of Mumbai and Delhi, airlines would be allowed to charge a minimum fare of Rs3,500 ($44) and a maximum of Rs10,000 ($126) while ensuring that 40 per cent of the tickets sold were priced below the median value.

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