India has now allowed airlines to operate at 85% of pre-Covid capacity for domestic flights and also eased the price cap norm.
The move to increase seat filling from 72.5% of capacity to 85% is expected to enable airlines to operate more flights and will increase passenger loads during the festive season, which will begin next month. Air travel normally witnesses an uptick from October to December – and with Covid cases on the decline in most parts of the country, airlines are optimistic.
The government has also halved the price cap period from 30 days to 15. Hence the airlines need not follow these limits for passenger ticket bookings made more than 15 days before the travel date.
India had imposed lower and upper limits on airfares based on flight duration when services were resumed on May 25 last year after a two-month Covid-19 lockdown. The lower limits were imposed to help the airlines that have been struggling financially due to coronavirus-related travel restrictions, while the upper ones were to insulate passengers from being fleeced when the demand is high.
On August 12, the Civil Aviation Ministry raised the lower as well as upper caps on fares by 9.83% to 12.82%. For instance, the lower limit for flight duration below 40 minutes was hiked to 2,900 rupees from 2,600 rupees, while the upper cap for the same duration was increased by 12.82% to 8,800 rupees. The price cap, however, does not cover passenger security fees, user development fees for airports, and the goods and services tax.
India’s domestic air traffic rose 34% to 6.7 million in August on a sequential basis on the back of an increase in capacity to 72.5%. Seat occupancy rose to over 70% last month. Increased vaccination and relaxed Covid-19 testing norms have also helped.
Civil aviation is one of the sectors worst hit by the pandemic travel restrictions. The government had imposed a two-month flight ban from March-end last year and later resumed only domestic flights, with airlines allowed to operate only 33% of their pre-Covid capacity. The cap was gradually increased to 80% by December and retained till June 1.
With the Covid-19 second wave wreaking havoc across the country, the government had brought down the capacity to 50% of pre-Covid levels during June and that was enhanced to 65% in July and 72.5% in August.
Scheduled international passenger flights continue to remain suspended since March last year. However, India has entered into bilateral air bubble arrangements with 28 countries including the US, Britain, Germany, France, UAE, and Bahrain. The cities covered include Washington, Chicago, London, Birmingham, Dubai, Abu Dhabi, Paris, Frankfurt among others.
Under this pact, special international flights can be operated by the airlines of the two countries between their territories.