The Government of India has reduced the airlines capacity from 80% to 50% from June 1, to curb the spread of coronavirus infections. This comes at a time when the government has also increased the base fare on airline tickets by 14% to account for the increasing fuel prices.
This move has left the leading commercial airlines divided. Especially since there is anyway a decrease in travel on account of the Covid 19 pandemic. The smaller companies believe that they will not be able to sustain, while the larger companies, with deeper pockets, believe it is a move that will keep infection rates low.
In 1994, the aviation industry in India was deregulated allowing market forces to determine the fares. Commercial airlines want the freedom to make their own decisions based on this. But the Aircraft Act of 1934 has a clause that allows the government to frame rules and regulate airfares.
The lockdowns in most cities has anyway regulated the capacity of air travel and airlines believe that the government’s decision will hamper their ability to sustain. The aviation ministry says the move is fair for airlines and passengers alike.