India's Aviation Minister Rules Out Year-Round Airfare Caps Despite Festival Price Surges

Civil Aviation Minister K Ram Mohan Naidu informed the Lok Sabha that implementing year-round fare caps is not feasible due to seasonal demand variations and aviation sector operational realities.

His statement comes amid growing concerns over expensive tickets during major festivals and as IndiGo, the country's largest airline, faces a mandated flight schedule reduction following significant disruptions.

Naidu explained that airfares naturally increase during high-demand periods, making an annual cap impractical. "We cannot cap airfares for the entire year," the minister told Parliament. "During the festive season, demand increases and fares go up. We have asked airlines to increase their capacity during these busy periods."

The ministry has expanded flight routes and introduced additional flights to provide passengers with more travel options during peak demand periods.

Naidu described government measures to maintain fares "within an adjustable and reasonable range," including directing carriers to increase seat capacity, add new flights on popular routes, and follow passenger-protection guidelines.

"Airlines have been advised to augment capacity during peak seasons," he stated. "More flights have been introduced, and flight routes have been expanded."

While responding to a debate on a private member's resolution regarding 'Appropriate Measures to Regulate Airfare in the Country' in the Lok Sabha, the minister also mentioned aircraft availability issues and ongoing discussions about manufacturing planes in India.

The resolution, later withdrawn, was introduced by Congress member Shafi Parambil.

Naidu noted that the aviation ecosystem involves multiple levels and various aspects, including airline viability.

Earlier this month, the civil aviation ministry implemented a distance-based cap on domestic airfares following IndiGo flight disruptions.

According to Naidu, domestic air ticket pricing remains "on par with other nations," making nationwide fare caps unfeasible.

The minister emphasized that a deregulated market ultimately benefits consumers, noting that ticket prices typically increase during festive seasons.

He stressed that deregulation remains essential to civil aviation growth. "If we want the civil aviation sector to grow, the first and foremost requirement is to keep it deregulated so that more players can enter the market." However, Naidu clarified that deregulation does not give airlines unrestricted freedom, and the government maintains authority to intervene when necessary.

Naidu revealed that state-owned Alliance Air has initiated a three-month pilot scheme with fixed airfares. After evaluating passenger benefits and feedback, the ministry might consider implementing a similar plan for private airlines.

The minister emphasized that capping airfares is not a "single-way solution" and noted that compared internationally, India's airfare growth rate has been negative in relative and real terms.

"There has been a 43 per cent decrease in airfares when you consider the Consumer Price Index (CPI), inflation...," he stated, adding that airfares are affordable, though he didn't specify the timeframe for this comparison.

"The government has exclusive powers in extraordinary circumstances when they feel that when airfares are rising above the normal and becoming abnormal, we are taking it up...," Naidu explained.

Addressing bottlenecks, the minister identified aircraft availability as the primary issue.

Indian carriers have ordered more than 1,700 aircraft, but global supply chain challenges have delayed deliveries.

Naidu discussed efforts to manufacture planes in India: "This government has taken a stance that we are not going to wait for these aircraft to be built... We are going to create a programme where aircraft can be built in the country. We should have a Made in India aircraft."

He mentioned discussions with Russian manufacturer regarding the Sukhoi SJ-100 regional aircraft: "We are talking with them. HAL is engaging with them. They have signed MoU (memorandum of understanding). They are going to get technology here so that we can build the plane here."

According to Naidu, negotiations are also underway with Brazilian aircraft maker Embraer. "We are telling them to come to India and manufacture here," he said.