Govt to wait before relaxing airline capacity and fare caps: Sources

As the aviation sector battles the impact of the second wave of COVID-19, sources say that the government will wait before relaxing airline capacity and fare caps for the sector.

In fact, the government is believed to have zeroed in on traffic thresholds for easing these limits.

While the daily domestic air traffic numbers have crossed the level of one lakh figure, still the overall aviation picture is weak and there is still a long way to go.

Currently, the vaccination drive is a concern, but as more people get vaccinated the expectation is that the traffic number will start looking better. Overall, the demand uncertainty is expected to remain for the next 2-3 months. But the situation is likely to improve from September and October onwards.

Last month, the government had cut down capacity for airlines to operate from 80 percent to 50 percent from June 1 in order to safeguard viability of airlines with weak finances.

“In view of sudden change in the number of Covid-19 cases, and decrease in number of passengers and reduced occupancy, the existing capacity cap of 80 per cent is reduced to 50 per cent,” the Ministry of Civil Aviation said in an order.