Lok Sabha Question No. 2346 (UNSTARRED), answered on 2023-08-03
Subject: Regulation of Airfare
Ministry: CIVIL AVIATION
Asked by: Sougata Ray, Kanakmal Katara, T.R.V.S. Ramesh, Dharmendra Kumar Kashyap, M.K. Vishnu Prasad, Deepak Baij, S.R. Parthiban, Beesetti  Venkata Satyavathi, S. Jagathrakshakan, Badruddin Ajmal, Mahesh Sahoo

## GOVERNMENT OF INDIA MINISTRY OF CIVIL AVIATION LOK SABHA

UNSTARRED QUESTION NO. : 2346

(To be answered on the 3 rd  August 2023)

## REGULATION OF AIRFARE

## 2346. PROF SOUGATA RAY

SHRI KANAKMAL KATARA

SHRI T.R.V.S. RAMESH

SHRI DHARMENDRA KASHYAP

DR. VISHNU PRASAD M.K.

SHRI DEEPAK BAIJ

SHRI PARTHIBAN S.R.

DR. BEESETTI VENKATA SATYAVATHI

SHRI S. JAGATHRAKSHAKAN

SHRI M. BADRUDDIN AJMAL

SHRI MAHESH SAHOO

## Will the Minister of CIVIL AVIATION

be pleased to state:-

- (a) the details of the steps taken by the Government to control the exaggerated domestic and international airfares in the country particularly during festival season;
- (b)  whether the Government has any proposal to formulate any policy regarding regulation of domestic and international airfares and if so, the
- details thereof;
- (c) whether the Government has drawn any action plan to achieve its aim to facilitate travel for common man at affordable fare to remote destinations of the country and if so, the details thereof and if not, the reasons therefor;
- (d) whether privatisation of Air India is a reason for price hike as there is no public airlines which could keep a control on price hike and if so, the details thereof; and
- (e) whether Government has any plan to fix upper limit of domestic airfare and to promote low cost airlines in the country to attract more passengers and if so, the details thereof?

## ANSWER

Minister of State in the Ministry of CIVIL AVIATION

(GEN. (DR) V. K. SINGH (RETD))

(a) & (b) Airfares are market driven and are neither regulated nor established by the Government. Airlines are free to fix reasonable tariffs taking into consideration  all  relevant  factors  which  include  the  cost  of  operation, characteristics of service and reasonable profit. Airlines, however, remain compliant with the regulatory provisions under Aircraft Rules, 1937 as long as the fare charged by them does not exceed the fare established and displayed on their website. Directorate  General  of  Civil  Aviation  (DGCA)  has  established  Tariff Monitoring Unit which monitors fares on select sectors on random basis. This ensures that the airfares charged by the airlines are within the established tariff of the airlines, which is displayed on their website. Increase in airfare has been noticed in a few sectors, primarily driven by seasonality and demand-supply constraints. Government has taken steps to sensitise the airlines,  and  consultations  are  held  with  airlines  on  regularly  to  keep passenger interest in mind and exercise moderation.The airfares in these select sectors are monitored daily and as a result of which, they have shown a declining trend. (c)  Ministry of Civil Aviation (MoCA) launched Regional Connectivity Scheme (RCS)- Ude Desh Ka Aam Nagrik(UDAN) on 21st October 2016. As on 20.07.2023,1152 routes have been awarded, out of which 479 routes have commenced, connecting 74 airports, including 2 Water Aerodromes. UDAN is an ongoing scheme where bidding rounds are conducted from time to time to cover more destinations/stations and routes under the scheme. (d)  With the repeal of Air Corporation Act in March 1994, the Indian domestic aviation has been deregulated. Airlines are free to induct capacity with any aircraft type, free to select whatever markets and network they wish to service. It is up to the airline operators to introduce air services to / from any airport in the country depending on their operational and commercial viabilities. As on 28.07.2023, a total of 08 Indian scheduled operators with 649 aircraft are operating commercial passenger services in the country. Ticket prices are fixed by the airlines keeping in mind the market, demand, seasonality and other market forces. Airline 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)

## (e) No such proposal is under consideration.

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