The total number of passengers carried by scheduled Indian carriers recorded 61.58% growth at 13.6 crore in the financial year 2022-23, the civil aviation ministry data shows. In the last fiscal, 8.4 crore passengers were carried by airlines.
The growth rate in the number of domestic air passengers stood at -62.23% in FY21 and just 0.62% in FY20, the year when India was hit hard by the Covid pandemic.
On the situation of rising airfares in the country, Minister of State in the Civil Aviation Ministry, Gen V.K. Singh (retd), ]answering a question on fluctuations in airfare in the Lok Sabha today, says the Directorate General of Civil Aviation (DGCA) has established 'Tariff Monitoring Unit', which monitors fares on select domestic sectors on a random basis.
"This ensures that the airfares charged by the airlines are within the established tariff of the airlines, which is displayed on their website. As the monitoring is done on variable routes selected on a random basis, the data on average airfare over the last five years is not compiled by DGCA," he adds.
He also clarified that airfares are neither established nor regulated by the government. "The airline pricing system runs in multiple levels (buckets) which are in line with practices being followed globally. The prices are fixed by airlines keeping in mind the market, demand, seasonality, and other market forces. The airfare increases with the increase in demand for seats as the lower fare buckets get sold out fast when bookings are offered by airlines Some of the airlines have introduced Apex-90, in addition to existing advance purchase schemes of 60 days, 30 days, 14 days, etc in which discounted fares are being offered which would entail travelling even during peak seasons on low fares," the minister adds.
He says all the domestic airlines are advised to self-regulate airfares and maintain reasonable price levels in sectors that had a substantial number of Go First flights and also to operate additional flights in the sectors operated by Go First. Analysts say Go First's insolvency may also have led to a surge in airfares as in the summer schedule that began on March 26 and will last until October 28, Go First was scheduled to operate 1,538 flights every week.
Notably, India’s airline industry, for the first time since the onset of the pandemic, is expected to be back in FY24. The industry is also likely to pare its net loss by 75-80% on-year to ₹3,500-4,500 crore this fiscal, compared with ₹17,500 crore last fiscal, as per ratings agency ICRA.
The central government in August 2022 had decided to remove the airfare fare caps on domestic flights from August 31, 2022, after analysing the daily demand and prices of air turbine fuel (ATF).