The civil aviation ministry has decided to remove price caps for the domestic aviation sector from August 31, giving airlines flexibility on passenger fares. Though airlines are expected to continue with the current level of fares given costlier fuel, there can be discounts on low-demand routes, flights with poor loads, and new routes, according to airline executives.
Caps on capacity and fares were introduced in May 2020 following the resumption of air travel after the nationwide lockdown. The government allowed 100 per cent capacity deployment in October last year, but it continued with the pricing regulation, citing an adverse cost environment.
