The Directorate General of Civil Aviation (DGCA) has allowed airlines to charge 10-30% more for domestic flights with immediate effect, as per a government order. The government has currently imposed a minimum and maximum limit on fares that airlines can charge from passengers and this fare cap order is effective until March 31.
DGCA has increased the minimum fare on all seven sectors by 10-12 percent and has raised the limit on maximum fare by around 30 percent, as per the government order. The seven sectors have been classified on the basis of approximate duration of flight.
The order effected immediately and comes at a time when airlines are staring at a traditionally weak quarter of Jan-Mar along with uncertain demand sentiment. Domestic air traffic on February 10 was at 67 percent of average daily domestic traffic seen in 2019. It is also important to look at the latest financials of the major domestic airlines to understand the domestic aviation picture better.
SpiceJet reported a net loss of Rs 57 crore for the quarter ending December 31st, 2020 as against a profit of Rs 77.9 crores during the same period last year. IndiGo, the largest airline in India, posted a net loss of Rs 620.1 crore for Oct-Dec as against a net profit of Rs 496 crore in the same period last year.
On May 21, the DGCA issued an order, according to which airfares on domestic routes were to be capped from May 25, 2020 with an intention to allow air services to resume without any massive drop or rise in prices. Domestic flights resumed after a 2-month shutdown due to the onset of COVID-19 pandemic.
The cap was set on the base fare and above the base fare, the passenger will have to pay taxes including GST, user development fee, passenger service fee among other charges.
Category A is for those two points whose flight duration time is less than 40 minutes such as Agartala-Guwahati, Amritsar-Srinagar, Bengaluru-Chennai, Bhopal-Mumbai, among others. Category B is for those two points whose flight time duration is between 40 and 60 minutes such as Ahmedabad-Bhopal, Amritsar-Delhi, Bengaluru-Goa among others.
Category C is for those two points whose flight time duration is between 60 and 90 minutes such as Ahmedabad-Chandigarh, Bengaluru-Kolkata, Bhopal-Hyderabad, Bhubaneshwar-Chennai among others. Category D is for those two points whose flight time duration is between 90 and 120 minutes such as Varanasi-Jaipur, Ahmedabad-Kolkata, Bengaluru-Bhopal, Delhi-Bhubaneshwar among others.
Category E is for those two points whose flight time duration is between 120 and 150 minutes such as Agartala-Delhi, Bengaluru-Jaipur, Chandigarh-Hyderabad, Chennai-Lucknow among others. Category F is for those two points whose flight time duration is between 150 and 180 minutes such as Ahmedabad-Guwahati, Bengaluru-Chandigarh, Chennai-Guwahati, Delhi-Kochi among others.
Category G is for those two points whose flight time duration is between 180 and 210 minutes for routes such as Coimbatore-Delhi, Delhi-Thiruvananthapuram, and Port Blair-Delhi.
(Edited by : Jomy)
First Published: Feb 11, 2021 4:29 PM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Lok Sabha Election 2024: What rural Delhi wants
May 16, 2024 10:10 PM
Over 50 onion farmers detained in Nashik ahead of PM Modi's visit
May 16, 2024 11:14 AM
Why Google CEO is cautiously optimistic about the election year
May 16, 2024 9:51 AM
Mark Mobius reveals how markets will react if NDA wins 400+ Lok Sabha seats
May 15, 2024 8:09 PM