“As a result of this intervention, prices have seen up to 60 percent decline. This is being monitored daily by the Minister himself,” as per ministry sources on data by DGCA’s Tariff Monitoring Unit. The official source further stated, “Airfares internationally have remained firm on account of various factors like the opening of markets after the pandemic and the resultant surge in demand, rise in ATF prices globally, supply chain disruptions on account of both Covid and Ukraine-Russia conflict… The rise in airfares has been mostly seen on select routes that were earlier being serviced by GoFirst.

A meeting with the airlines was held on June 5, 2023, where airlines were strictly advised to self-regulate fares on certain select routes that have seen considerable surge pricing of late. A mechanism for ensuring reasonable pricing within the high reservation booking designator (RBD) will be devised by airlines.”

“The DGCA is monitoring this. During any calamity, airlines need to keep a tight check on the pricing of air tickets in view of the humanitarian situation and monitor and control any surge in ticket prices to/from that region. In the case of the unfortunate Odisha tragedy, airlines were advised to provide free carriage (cargo) services to the families of the deceased,” it stated.

Even in the case of Delhi – Ahmedabad, the Minimum D1 fares, which were as high as 60 percent till Monday, have come down to 20 percent, the report said.

Earlier on June 7, Civil Aviation Minister Jyotiraditya Scindia said that airfares on certain routes from Delhi have been considerably reduced by 14 to 61 percent following the airlines’ advisory group meeting.

Scindia explained that airlines have the authority to determine airfares, and various factors are considered, including market dynamics and season. The aviation industry employs an algorithm for pricing decisions.

“The airlines have been given rights to fix airfares which are market controlled. The aviation market in the country is season based. The rates are also fixed accordingly. If capacity is low and demand is high, and input costs are not reduced, then rates will be high. There is an algorithm to decide the fare,” he said.

He further said that private airline companies also have their own social responsibility and there should be a limit to increasing fares across sectors. Further, clarifying and explaining the role of the aviation Ministry, he said, “The role of the ministry is that of a facilitator and not a regulator.”

Scindia chaired the high-level meeting, which was called on June 5 by the airline’s advisory group, where he urged airlines to self-regulate airfares and maintain reasonable price levels. “There have been some unforeseen incidents in Manipur, and now in Odisha, fare rates should be strictly monitored by airlines,” Ministry advised airlines

Source: ANI

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Airlines have been asked to self-monitor airfares on routes that have seen a considerable rise in ticket prices, particularly those that were served by Go First earlier. Go First stopped flying from May 3 and the reduction of capacity due to the crisis at the budget airline has come at a time when the peak domestic air travel period is round the corner.

A mechanism should be devised by airlines to ensure reasonable pricing within the high RBDs (Reservation Booking Designator) and the same would be monitored by the Directorate General of Civil Aviation (DGCA), the ministry said in a statement. Airfares are deregulated under the current regulatory regime.

Besides, the ministry has said that during any calamity, airlines need to keep a tight check on the pricing of air tickets “in view of the humanitarian situation and monitor and control any surge in ticket prices to/ from that region”.

After the deregulation of the country’s airline sector, airfares are market-driven and are neither established nor regulated by the government. Airline pricing runs in multiple levels (buckets or Reservation Booking Designators). Scindia, on March 16, informed the Lok Sabha 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 an increase in demand for seats as the lower fare buckets get sold out fast when bookings are offered by airlines,” he had said in a written reply.

India is one of the fastest-growing civil aviation markets in the world and domestic passenger traffic has been rising after being significantly impacted by the coronavirus pandemic. In April, domestic airlines flew 128.88 lakh passengers, as per the latest official data. Crisis-hit Go First is undergoing a voluntary insolvency resolution process.

Source: PTI

The post Govt Asks Airlines To Keep Airfare Low Amid Odisha Train Accident, Go First Crisis appeared first on Rma News: Latest News, Live Breaking News, Today News, Political News Updates.

Earlier this week, senior executives of Go First discussed the revival plans with senior officials of the Directorate General of Civil Aviation (DGCA). Apart from the uncertainty staring at more than 7,000 Go First staff, a significant fallout is the spike in air ticket prices on certain routes that used to be serviced by the airline, which was operating around 170-180 flights daily.

The crisis at Go First, having its roots in non-availability of Pratt & Whitney engines resulting in grounding of more than half of its operational A320 neo fleet, reached a flash point as the promoters of the carrier decided to suspend flights and sought voluntary insolvency resolution proceedings on May 2. The airline has not flown since May 3 and its petition for the insolvency proceedings was admitted by the National Company Law Tribunal (NCLT) on May 10.

Also, many lessors who have leased planes to the no-frills carrier have challenged the insolvency proceedings as they seek to exercise their rights to take back the aircraft despite the moratorium on the carrier’s financial obligations and transfer of assets.

Travel portal Cleartrip’s Vice President – Air Category – Gaurav Patwari said the significant capacity reduction due to Go First being non-operational has contributed to the spike in airfares.

“There is a sharp spike in fares especially for travel within D15 which can be attributed to the ongoing Go First issue. The fares within D15 travel have increased by 22 per cent and at the aggregate level up by more than 20 per cent over April for domestic travel,” he said. Generally, D15 refers to booking 15 days before travel.

“The spot fares in May have risen significantly versus April primarily due to peak season demand and a reduction in capacity due to the grounding of Go First, thereby creating an imbalance in demand and supply. The fares in D0 to 1 window are up by 40 per cent. We expect the current scenario to continue till mid of June,” he said.

Amid a spike in airfares on certain routes, the civil aviation ministry is doing an analysis of the routes that have been affected by the suspension of flights by Go First. On Thursday, Civil Aviation Minister Jyotiraditya Scindia said there is an unusual situation due to the Go First crisis and an excess demand on routes that the airline had been operating.

In a reflection of the imbalance between demand and supply, airfares on certain domestic routes are much higher than flights to destinations like Maldives and Dubai.

“Fares for Leh and Dehradun are currently 30 per cent higher compared to the fares for destinations like Maldives and Dubai. Average fares for Maldives and Dubai are Rs 11,000 whereas for Leh/Dehradun have gone up to Rs 14,200,” Patwari said.

Meanwhile, with many pilots at the now grounded Go First looking for other opportunities, the airline, in May, offered its captains Rs 1 lakh per month as “retention allowance”, in addition to their salary. First officers will get a retention allowance of Rs 50,000.

On May 30, Go First announced extending the cancellation of flights till June 4 due to operational reasons. Initially, the flights were suspended for three days till May 5 and subsequently, the suspension has been extended multiple times.

According to Patwari, the domestic demand has been robust this summer with daily flown passenger consistently hitting above 4.20 lakh. Consumer sentiment is strong and leisure & VFR (Visiting Friends and Relatives) travel are at an all-time high. Go First had been flying for more than 17 years.

Source: PTI

The post Go First Insolvency’s Impact On Aviation Industry: Uncertainty Over 7000 Jobs, Rising Airfare appeared first on Rma News: Latest News, Live Breaking News, Today News, Political News Updates.

“… I have put together a group in the last couple of days and we are doing an analysis of a lot of those routes… That have been affected by this unusual event (Go First crisis). One is Srinagar, Pune, slightly Ahmedabad, we are doing a full analysis on that… We will speak to airlines to make sure fares are within a certain level… It is an issue created by an unforeseen demand-supply imbalance,” he said in response to a query related to high airfares on certain routes.

He also said that civil aviation is a deregulated sector. On lessors seeking to take back planes leased to Go First and legal proceedings in this regard, Scindia said, “We are doing the work from the regulatory side in terms of putting together the international framework to make sure that lessors are also well protected”.

While speaking about the growth potential of the country’s civil aviation sector, the minister also said that during the festive season, daily domestic air passenger traffic could touch 5 lakh. On whether he is in the race for the chief minister post in Madhya Pradesh, which will be going for polls later this year, Scindia said his race is not for a chair, post or position.

“I am ambitious for my people, development, progress… My pursuit is not politics,” he emphasised.

Source: PTI

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