The civil aviation ministry has hiked the maximum and minimum limit on domestic airfares by 12.5 percent, officials aware of the matter said.
In India, the civil aviation ministry has capped the domestic airfares since May 2020 when flight operations resumed after a two-month pause due to the onset of the COVID-19 pandemic.
The government has also allowed domestic airlines to deploy more capacity as the demand in domestic market has started improving owing to better consumer sentiment.
Airlines are now allowed to deploy up to 72.5 percent capacity as against 65 percent earlier.
The domestic demand has been showing signs of revival since the end of June and early July and over the last two weeks, it has been hovering around 2-2.5 lakh daily passengers, indicating green shoots in air travel demand trajectory.
"The government does not regulate airfares. However, during the pandemic the government prescribed fare bands for domestic airlines. These fare bands have been revised on three occasions to compensate the airlines for the increase in the cost of Aviation Turbine Fuel (ATF). Any further adjustment of fare band would depend upon the amount of increase in the cost of ATF," Minister of State for Civil Aviation Gen VK Singh had said on July 22 in a written reply to Lok Sabha.
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