Civil Aviation Minister Ram Mohan Naidu addressed the Lok Sabha on Friday, emphasizing that while the government can check airfares, deregulation remains crucial for the continued growth of India's aviation sector. He argued against the feasibility of capping airfares throughout the year, stating that a deregulated market ultimately benefits consumers.
Naidu acknowledged concerns about rising air ticket prices, particularly during peak seasons and following events like the IndiGo flight disruptions. However, he maintained that market demand and supply should primarily regulate airfares. He pointed out that airfares usually increase during festive seasons because of heightened demand on specific routes and at particular times, making it impractical to impose year-long caps on any given sector.
The Minister stressed that a deregulated market encourages more players to enter the aviation sector, fostering greater competition and ultimately driving down ticket prices over time. He cited examples of countries with rapidly growing aviation sectors that have embraced deregulation. Naidu also noted that domestic air ticket pricing remains on par with other nations.
Naidu clarified that deregulation does not imply a complete absence of government oversight. He affirmed that the Centre retains powers under the Aircraft Act to intervene in extraordinary situations to protect passengers from opportunistic pricing. He referenced instances where the government has stepped in to regulate fares, such as during the Covid-19 crisis, the Maha Kumbh, the Pahalgam terror attack, and the recent IndiGo disruptions. Following the IndiGo disruptions, the government introduced a fare slab to curb opportunistic pricing. He also mentioned the 'Fare Se Fursat' scheme, in collaboration with the Alliance of Airlines, which fixes fares on 25 routes, including those in the Northeast and South India.
Furthermore, Naidu countered criticism regarding rising ticket prices by stating that airfares in India have, in fact, decreased significantly when adjusted for inflation. He presented data indicating a 43% reduction in airfares based on the Consumer Price Index (CPI), compared to a 23% drop in the US and a 34% decrease in China.
The Minister addressed the issue of aircraft availability, noting that Indian airlines have over 1,700 aircraft on order, but global supply chain issues have caused delivery delays. To address this, the government is exploring domestic aircraft manufacturing and is in talks with companies like Russia's Sukhoi and Brazil's Embraer to encourage them to manufacture in India.
Naidu concluded by reiterating the government's commitment to a thriving aviation sector that balances market dynamics with passenger protection. He emphasized that while the government can intervene in extraordinary circumstances, deregulation remains essential for attracting more players, fostering competition, and ensuring the long-term health and growth of India's aviation industry.
