Aviation Minister Scindia Addresses Airfare Hike Issue in Lok Sabha, Citing COVID’s Impact on Airlines

During a Lok Sabha session, Civil Aviation Minister Jyotiraditya Scindia responded to concerns about airfare hikes amidst the aviation sector’s significant losses due to the COVID-19 impact, emphasizing the airlines’ sustainable operations in such challenging circumstances.

Scindia emphasized the cyclical nature of civil aviation in response to IUML MP ET Mohammed Basheer’s question about airfare increases and government control. He described the industry’s high and low seasons, noting the high season from October to mid-January and the subsequent low season from May to June before the holiday season resumes.

Acknowledging the global nature of this pattern, Scindia underscored the government’s monitoring efforts through a tariff monitoring unit, which randomly observes 60 routes. He revealed that airlines have collectively suffered substantial losses, ranging from Rs 55,000 crores to Rs 1,32,000 crores annually, severely impacting their financial viability due to the pandemic.

Despite these adversities, Scindia commended airlines for sustaining operations on a very sustainable basis. He presented data indicating a decline in fares across most routes between January and October in both 2022 and 2023, except for the seasonally adjusted high season in January, when fares naturally rise.

Moreover, Scindia addressed concerns about the disproportionate hike in airfares compared to the surge in air turbine fuel (ATF) prices, which account for about 40% of airlines’ operating costs. Despite ATF prices rising significantly from Rs 55,000 to Rs 1,50,000 per kilolitre, airfares did not see a commensurate increase.

Responding to the authority for regulatory mechanisms, Scindia noted that civil aviation has operated within a deregulated framework since 1993. However, a Tariff Monitoring Unit monitors excessive pricing on specific routes and conveys concerns to airlines.

The ongoing winter session of Parliament, which commenced on December 4 and is set to conclude on December 22, remains a platform for discussing and addressing critical concerns impacting various sectors, including civil aviation, amidst the pandemic-induced challenges.