The upper and lowercase on airfare are introduced as a method to protect passengers from paying for overpriced tickets and weaker airlines from losing out of the competition
The removal of airfare caps coming into effect from Wednesday, consumers can expect forward bookings at discounted rates as competition is set to increase especially in the competitive routes with new airlines entering the market. However, the fares may continue to remain high on the monopoly routes.
The carriers will be free once again to set fares according to the demands of the market and compete, travel agents are expecting a jump in bookings with ticket prices coming down in the coming months, especially during the upcoming festival season. Speculations have emerged that the airfares are set to surge significantly after the limitation by the government has been removed.
An IndiGo spokesperson said the “Government’s decision to remove airfare caps is a welcome move and will allow airlines to follow dynamic pricing on airfares“.
The Ministry of Civil Aviation had earlier stated in a circular released on August 10 is as follows:
In the meantime, Vistara said “It will continue to have a balanced pricing strategy for the passengers“. Giving details, a Vistara spokesperson said in a free market scenario, airfares are an outcome of a multitude of factors, such as the dynamics of demand and supply, the operational environment, seasonality, cost, competition, market sentiment and taxation.
