Lok Sabha Question No. 53 (STARRED), answered on 2024-11-28
Subject: Increase in Airfare
Ministry: CIVIL AVIATION
Asked by: Thiru Dayanidhi Maran

## GOVERNMENT OF INDIA

## MINISTRY OF CIVIL AVIATION

## Lok Sabha

STARRED QUESTION NO. : 53

( TO BE ANSWERED ON THE  28th November 2024 )

## INCREASE IN AIRFARE

## 53.     THIRU DAYANIDHI MARAN Will the Minister of CIVIL AVIATION

be pleased to state:-

- (a) whether it is true that there have been fluctuation in air ticket prices and a 40% increase is reported during the last year and if so, the details of action taken thereon along with the corrective steps taken in this regard;
- (b)  whether  there  are  any  plans  to  set  a  ceiling  on  airfare  as  per sectors, especially during high-demand periods and if so, the details thereof;
- (c)  the details of meetings or consultations held with industry and stakeholders in this regard;
- (d)  the  criteria  adopted  by  various  airlines  in  determining  fares  at present;
- (e)  the  details  of  framework  or  policy  being  considered  to  set  a transparency mechanism to prevent arbitrary pricing; and
- (f) whether the Government proposes to take initiatives to encourage fair competition or reintroduce public sector participation to provide more affordable options for travellers and if so, the details thereof?

## ANSWER

Minister of CIVIL AVIATION      (Shri Kinjarapu Rammohan Naidu)

(a) to (f) A statement is laid on the table of the House.

******

Statement referred to in reply to Parts (a) to (f) in respect of Lok Sabha Starred Ques. No. 53 for reply on 28.11.2024 regarding  "Increase  in  Airfare"  by  Shri  Thiru  Dayanidhi Maran    ;  (a)  &  (f):  With  continuous  engagement  with airlines  &  Online  Ticketing  Agents  (OTAs)  and  keeping a watch on the movement of airfares by the government, the airfares have moderated in 2024 relative to 2023. Notably, during festival seasons, a decrease in airfares  was observed  in  various  sectors.  With  the  enhancement  of capacity by induction of more aircraft fleet, modernization of  airports  and  development  of  new  airports,  domestic passenger traffic has increased to 153,674,310 in 2023-24 as compared to 136,028,656 in the year 2022-23. Even in the  current  financial  year  2024-25  upto-September,  the domestic passenger traffic (79,345,065) has surpassed the volume  (75,358,445)  during  the  corresponding  period  in the year 2023-24, reflecting a growth of 5.3%. The airlines have  also  been  sensitized  to  ensure  reasonability  while fixing  the  airfares  and  to  keep  passengers'  interest  in mind.  ; A meeting was held on 01.08.2024 with all airlines wherein,  possible  steps  to  increase  the  transparency  of Airfare  were  discussed.  The  importance  of  airlines  to ensure  fair  and  reasonable  airfares  so  that  the  sector serves the general public and witnesses continuous growth was  emphasized.; ; A meeting was  held on 20.09.2024 wherein OTAs were advised to take all necessary steps to ensure speedy refund to the passengers and to effectively handle the issue of fare hike while booking so as; to increase the passenger satisfaction level.  ;  Moreover, DGCA held a meeting with the  Airlines  on  19.11.2024  wherein  several  key  issues identified  during  the  meeting  held  on  01.08.2024  were emphasized  for  compliance  with  representatives  of  the Airlines. ; Directorate General of Civil Aviation (DGCA) has setup a Tariff Monitoring Unit (TMU) that monitors airfares on  select  domestic  sectors  on  random  basis  by  using airlines  websites  on  monthly  basis  to  ensure  that  the airlines do not charge airfares outside the range declared by them.; ; The airfares are dynamic in nature and follow the  principle  of  demand  &  supply.  The  trends  in  airfare prices in India exhibit considerable seasonality, prevailing fuel  price,  the  capacity  of  the  aircraft  operating  on  the route, competition on the sector, season, holidays, festivals,  long  weekends,  events  (sports,  fairs,  contests) etc. The months of May and June experience heightened traffic, with a notable peak in international travel commencing  in  mid-July,  which  concurrently  influences domestic  demand.  From  July  to  September,  there  is typically  a  decline  in  travel  activity  due  to  the  monsoon season. Nevertheless, the arrival of the festive season in October,  particularly  during  the  celebration  of  Diwali, triggers  a  notable  resurgence  in  travel  demand.  By  midJanuary,  travel  demand  begins  to  wane,  continuing  its decline until the final week of April. Following this period, a  renewed  interest  in  travel  coincides  with  the  summer holidays,  contributing  to  an  increase  in  demand  once again. ; Besides this, the pricing of airfares is significantly influenced  by  operational constraints at airports, are subject to limitations imposed by terrain, weather conditions, and restricted operating hours. The combination of constrained capacity and elevated demand leads to increased fares on these routes due to

operational  limitations  and  capacity  restrictions.  ;  When setting  prices,  airlines  consider  above  factors  such  as market conditions, demand fluctuations, seasonal trends, and  other  pertinent  market  influences.  This  approach allows  them  to  adjust  fares  in  a  way  that  reflects  the current  travel  landscape.    Airfares  are  not  subject  to regulation by the Government  and  airlines have the flexibility to determine their airfares based  on their operational  needs,  while  adhering  to  Rule  135  of  the Aircraft  Rules,  1937.  While  the  government  generally refrains from regulating airfares to maintain market competitiveness,  however,  it  remains  vigilant,  and  the Government intervenes to shift capacity from one sector to another to prevent exorbitant pricing to ensure passenger  comfort  and  welfare.  ;  Given  the  complex dynamics  of  the  Indian  aviation  industry,  Government  is playing the role of a facilitator by way of creating enabling environment to support the growth of the sector.;