Rising airfares, yet unable to keep pace with ATF price rise: Scindia

Addressing the concerns regarding rising airfares in the Indian aviation sector, Union Minister of Civil Aviation Jyotiraditya Scindia, during the Question Hour in the Lok Sabha, informed that the Ministry of Civil Aviation has a tariff monitoring unit in place that looks at fares of 60 routes on a random basis.

The tariff monitoring unit monitors fares 30 days, 15 days, 7 days, 3 days, 2 days and 1 day ahead of the scheduled flight.

This comes at a time when Indian airlines including Indigo introduced a fuel surcharge citing rising prices of aviation turbine fuel (ATF), while others increased their ticket prices by a quantum to absorb the costs. 

Citing the huge losses made by the Indian airlines to the tune of Rs 55,000 crores to 1,32,000 crores on an annual basis, Scindia underscored that despite the impact of the Covid-19 pandemic and rising jet fuel cost, airfares have not increased in the same proportion.

“Covid completely destroyed the financial viability of the airlines. Even in that environment, our airlines have operated on a very sustainable basis,” he said, clarifying that the civil aviation sector is deregulated.

ATF is close to 40% of the operating cost of airlines and the prices have increased three times from Rs 55,000  kilo litre to 1,55,000 rupees a kilo litre.

According to the minister, airfare today is competitive with the fare of the AC First Class of the Indian Railways.

In the last nine years, the number of air passengers has gone up to 14.5 crore from just 6 crore in 2014, said Scindia, estimating a three-fold growth in the sector with the count going up to 42 crore by 2030.

He credited the growth to the improved regional connectivity with the ‘Ude Desh Ka Aam Nagrik’ (UDAN) scheme.

Under UDAN a total of 2.75 lakh flights carrying more than 130 lakh passengers have taken off so far due to the viability gap funding offered by the central government scheme, Scindia informed the Rajya Sabha. 

Looking ahead, Scindia outlined the ambitious target of achieving 1,000 routes under this scheme. Currently, 517 routes are operational and 15% of these routes (78) are continuing even after three years, he explained. 

Highlighting the mega orders of 470 and 500 aircraft respectively by Air India and Indigo, the minister asserted that the aviation sector is poised to become the ‘backbone’ of transportation in the country.