Parliament has raised concerns about rising airfares, with parliamentarians from cross sections of the house asking questions about the hike in fares for domestic and international flights. The new minister for Civil Aviation emphasized fare, and restraining extreme fare as his new agenda.
Dynamic Pricing and Government Regulation
Airfares to an extent depend on supply and demand forces in the market. While fares are within the government’s jurisdiction as evidenced by post-pandemic measures to set a floor and a cap on the prices, the government presently does not intend to intervene. Bookings have gone up, especially for the next weekend since it is a long weekend, and costs for flight tickets from Delhi to Goa for the one-way journey lie between ₹24,000 and ₹50,000 for the return journey. Still, the option is considerably cheaper if traveling dates are shifted by a few days.
Selective High Fares
Delhi to Goa costs fairly high, for example, a return ticket costs as high as ₹16,770 but routes like Bengaluru to Kochi still cost under ₹6,700 for a return ticket. This is something rather unusual because the prices for buses have a similar range, while airfares are selected for the increase.
International Fare Concerns
The same applies to the international connections that were criticized for having high tariffs; the impact is especially evident among the Indians in the Gulf and ASEAN countries. Lavish increases in rates during certain seasons of the year then create grumbles that international flight charges inflate than those of domestic ones. Many decisions about international flights are set by the bilateral agreements, thus, there can be many problems with increasing flights and managing fare increases to the desired level. Foreign carriers are also outside the Indian government’s regulatory domain, which adds to fare control problems.
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Complexities of Dynamic Pricing
Cramer also notes that the principle that holds for many airlines, that is, hold out for low-priced tickets and they will become cheaper, does not apply for airlines operating in India. As an example, today’s fare for December from Delhi to Goa would be at a minimum of ₹23,000. Likewise, more distant fares for Tier II cities including Lucknow are highly priced and clearly point towards the random nature of companies’ pricing plans.
Report By: Sonali Sarkar
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