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CoVID19 Air Travel Rules & Fairness of Airline Fare Caps

Updated: May 29, 2020

#AirTravel #Resumes #CoVID19 #Guidelines #AirlineFareCap



Domestic airline operations are set to resume across major cities in the country from 25th May 2020. Flight operations will restart from major Indian airports as airlines will resume function with a one third (about 33%) of their summer scheduled capacity. Before the airline perspective, here's an infographic addressing the key measures as you take your upcoming flight.



The Ministry of Civil Aviation (MoCA India) headed by Hardeep Singh Puri on Thursday said that airfares in India will remain capped for three months till 24 August as the country gradually allows Airlines to resume operations. Find the government advisory below:

Circular 21.05.2020
.pdf
Download PDF • 1.78MB

The Circular issued by DGCA with Order No. AV13011/1/2020-US shows the detailed price cap across the seven flight fare bands denoted by alphabets A to G. Each band is associated with a flight duration, show cased as below,




A minimum of 40% of the tickets of a particular flight shall be sold for the fare less than the midpoint of minimum and maximum fares. Example 40% of tickets on the Mumbai-Goa flight should be sold at a price bellow 4,000rs. These 'sectors' will be enforced until 23:59 hours of 24 August, 2020.

Merits:


· The capping of air fares will keep the predatory prices in check with the airlines so that they don’t under-price the flights, which will avoid kicking some of the small airlines out of business.

· Airlines use revenue management tools to optimise demand so as to increase their underlined revenues, this means that even in cases of high demand airlines cannot charge exorbitant prices as there is a maximum fare cap.

· The Customer and businesses which are already hard hit by CoVID19 will benefit out of this as this will allow them to fly with possible affordable pricing across sectors.


Demerits:


· Airlines thrive for inventory optimization through forecasted demand using revenue management tools, this price cap will lead to lower revenues for the airlines as there will be a lower chance of optimisation.

· Since there are no major economic bailouts for the airlines, such measures will create an extra burden on airlines which already suffer from high operating costs.

· Airlines operating costs is further set to increase in advent of the new added cost of Coronavirus situation.

· There's no relief on Airport charges and taxes

This capacity and price regulation have come as a double whammy for the airline sector which was already hard hit by CoVID19. Nonetheless, the measures are temporary by nature and will possibly benefit the passenger but at an unfair expense to the airline.


Access the Detailed Government Published Infographics here :


Air Travel Guidelines MyGov
.pdf
Download PDF • 3.66MB

Access the Advanced Certificate Training Program on Airline Management here : HERE


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