- Indian government relaxes COVID-period restrictions on the country’s domestic air carriers.
- Indian airlines will now be allowed to operate at 85 percent of their pre-pandemic capacity.
- Indian domestic airlines will also be allowed to set their own fares for tickets beyond 15 days of the booking date.
India’s Ministry of Civil Aviation raised the cap on domestic air carrier capacity today, enabling Indian airlines to operate at 85% of their pre-COVID-19 capacity instead of current 72.5%.
Indian civil aviation authority also changed the price cap formula, allowing domestic airlines set their own fares for tickets beyond fifteen days of the booking date.
Until today’s adjustments, the price caps were applicable on tickets up to 30 days from the booking date.
The changes announced by the Ministry of Civil Aviation will allow Indian air carriers to operate more flights and will push up passenger loads with the onset of the national festive season next month.
India’s domestic air traffic has increased 34% to 6.7 million in August on a sequential basis on the back of an increase in capacity to 72.5%.
Increased vaccination and relaxed COVID-19 testing requirements have helped too. Industry-wide seat occupancy too rose to over 70% last month.
The relaxation of flight capacity and easing of the pricing restrictions comes after several rounds of negotiations between India’s Civil Aviation Ministry and CEOs of Indian airlines.
The move to cap capacity and fares severely divided the industry with Ronojoy Dutta, CEO of India’s largest airline IndiGo, calling to remove government interference over price and capacity, saying this prevents airlines from making commerce-based decisions.
Operators of the country’s largest airports —Delhi, Mumbai, Bangalore — have urged the government to end the caps on capacity and price as this is obstructing the return of passengers and badly hurting the revenues of India’s mostly privately owned airports.