Govt can’t control airfare hikes: Civil aviation minister

Airfares in India have reached unprecedented levels, leaving passengers frustrated and helpless, especially during peak travel seasons and after cyclones. Despite widespread public outcry, Union Civil Aviation Minister K Rammohan Naidu has stated that the government has little control over airfare hikes in the deregulated aviation sector.

A deregulated sector: Govt stance

Responding to concerns in Parliament, Naidu explained that fare regulation is not standard practice globally. He emphasised that a deregulated framework is necessary for the aviation sector’s growth and sustainability, stating: “Nowhere in the world does any country regulate air prices while maintaining progress in aviation. A deregulated sector benefits the market and all stakeholders.”

Also read: Airfares climb up to 25% for Diwali, Onam festival season travel

The minister also pointed to high VAT (Value Added Tax) rates imposed by states on aviation turbine fuel as a significant contributor to rising ticket prices. He urged states like West Bengal, Delhi, and Tamil Nadu to consider reducing VAT to ease the burden on passengers.

Alarming fare increase

Recent data highlights shocking fare surges across domestic routes. Flights from Mumbai to Ahmedabad recorded a staggering 1,258% hike, while routes to destinations like Bengaluru and Goa witnessed an increase of 766% and 625%, respectively. Even less popular destinations like Agra and Vijayawada experienced hikes ranging between 72.86% and 310%.

Examples of fare hikes include: Mumbai to Delhi/Kolkata flights jumping from ₹6,000-₹13,000 to ₹12,100-₹27,800 in December; Akasa Air’s Mumbai-Ahmedabad fares showing the highest spike during September-October.

Consumer backlash, legal complaints

The Mumbai Grahak Panchayat (MGP), a consumer rights organisation, has filed complaints with the Ministry of Consumer Affairs against airlines like IndiGo, Air India, Akasa Air, and SpiceJet for what it terms “unjustifiable” fare hikes. Civic groups accuse airlines of exploiting festive and emergency periods to inflate prices, further burdening passengers.

Also read: Why airfares are unlikely to ever come down to pre-pandemic levels

Who bears responsibility?

While the central government attributes fare spikes to market dynamics and state-level VAT policies, consumer advocates argue that the government cannot deflect responsibility. Critics claim that a lack of intervention perpetuates monopolistic practices in certain routes, leaving consumers vulnerable.

With Christmas and New Year travel plans now facing financial strain, the public awaits concrete action. Will the state governments respond by reducing VAT, or will the central government revisit its regulatory policies to prevent such price shocks in the future?

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