Govt to re-evaluate airfare cap over ATF price movement: Scindia

NEW DELHI:  Civil Aviation Minister Jyotiraditya Scindia said, the government would definitely re-assess the fare cap in place for domestic airlines once there is a more favourable situation in terms of jet fuel prices.

The coronavirus pandemic shook the nation's civil aviation industry, but it is currently in recovery mode, particularly in terms of the number of passengers flying, and Akasa Air has begun operations, becoming the first domestic carrier to do so in the previous eight years.

The ministry has implemented the fare cap system for the regional airlines against the backdrop of the ongoing pandemic blues. For a 15-day cycle, the fare capping is now effective on a rolling basis.

Briefing media, Scindia said that the current state of the airline fares shows that they are both very far from the high portion of the fare cap and too close to the low portion.

I have witnessed stabilisation, and when the time is right, we will definitely take that into consideration. I am observing a decline in ATF prices, and if the environment improves, we will undoubtedly reevaluate this, the minister said.

Scindia had stated in May that the fare restriction serves as a safeguard for both passengers and airlines.
Prices for Aviation Turbine Fuel (ATF), also known as jet fuel, have been rising recently, particularly in the aftermath of the continuing Russia-Ukraine conflict. Although costs have recently decreased, they are still significantly higher than they were before the outbreak.

The price of ATF has increased because of the Russia-Ukraine war, said Scindia, who acknowledged that airlines are dealing with numerous structural challenges. It went from Rs 53,000 per kilolitre in 2019–20 to approximately Rs 1,41,000 per kilolitre until last week.

He pointed out that although the cost has decreased by approximately 16%, or about  Rs 21,000 per kilolitre, it is still double what it was previously.

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