The Indian government’s decision to fix airfares to be levied by domestic airlines is a retrograde step, according to global airlines body IATA. “India’s Air Corporation Act was repealed in 1994, so the announcement to regulate airfares more than 2 decades later comes across as certainly a step back,” Albert Tjoeing, assistant director, Corporate Communications, IATA, said in response to an e-mail query by The Hindu.
On Thursday, the Ministry of Civil Aviation prescribed the minimum and maximum fares for seven broad categories of routes, divided on the basis of flight duration.
“Airlines need to have the freedom to make their commercial decisions, including the pricing of airfares. Hence, we recognize and hope that this is a one-time measure as a result of COVID-19, and will be discontinued on 24 Aug,” Mr. Tjoeing said.
The global body, which has been urging governments around the world to provide a financial package to airlines hit by restrictions on air travel due to the COVID-19 pandemic, reiterated its stance on Friday. Instead of regulating airfares, India should make it a priority to support its airline industry through practical financial measures, it said. Among the measures it has suggested are taxation relief, including alleviation of payroll taxes, corporate taxes, concession fees as well as loan guarantees, to ensure financial liquidity in the aviation sector.
It forecasts the earnings from domestic travel to recover to 2019 levels only by 2022 and those for international travel by 2024.