New Delhi: Weeks before the government comes out with a new policy to govern the civil aviation sector in the country, it has ruled out the capping of air fares.
The move would come as a relief for the airlines, which have been facing intense competition with the arrival of new domestic airlines. The move to cap the air fares was thought out following complaints from passengers that the airlines were charging arbitrary fares.
Civil Aviation Minister Ashok Gajapathi Raju while talking to a news agency said the competition would take care of the fares and pointed out that restricting the air fares will not make good business sense as it could also jeopardise the government’s regional connectivity plan as such a move may discourage airlines to fly on non-profitable routes.
However, the government has proposed a fare cap at Rs 2,500 for an hour’s flight on regional routes. As per the scheme, the Centre will fund 80% of the airline’s losses and the rest will come from the states.
The draft proposes a regional connectivity fund to be set up by levying a 2% cess on domestic and international tickets.
09/06/16 Tribune
To Read the News in full at Source, Click the Headline
The move would come as a relief for the airlines, which have been facing intense competition with the arrival of new domestic airlines. The move to cap the air fares was thought out following complaints from passengers that the airlines were charging arbitrary fares.
Civil Aviation Minister Ashok Gajapathi Raju while talking to a news agency said the competition would take care of the fares and pointed out that restricting the air fares will not make good business sense as it could also jeopardise the government’s regional connectivity plan as such a move may discourage airlines to fly on non-profitable routes.
However, the government has proposed a fare cap at Rs 2,500 for an hour’s flight on regional routes. As per the scheme, the Centre will fund 80% of the airline’s losses and the rest will come from the states.
The draft proposes a regional connectivity fund to be set up by levying a 2% cess on domestic and international tickets.
09/06/16 Tribune
