DGCA removes fare caps on tickets of domestic flights from August 31

The Directorate General of Civil Aviation has decided to remove the ongoing fare caps on the tickets of domestic airlines from August 31.

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The talks started after some airlines renewed their demand to remove the pricing caps, claiming the regulation is a hurdle to the full-fledged recovery in domestic air traffic.

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Airlines: over-regulation is a hurdle to the full-fledged recovery of domestic air traffic. Source: Moneycontrol

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Fare caps are currently applicable on a rolling basis for a 15-day cycle, which means airlines are free to set prices of tickets beyond a 15-day period from the date of booking.

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Experts said it has become difficult for airlines to maintain operating efficiencies under the current fare caps, given that ATF accounts for 30-35 percent of operational costs.

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The lower end of the fare band was put in place to help airlines that had been struggling financially due to travel restrictions.

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