Amid concern over rising airfares, Civil Aviation Minister Ashok Gajapathi Raju has said that capping would not be the solution to deal with surge in airfares, as it would also push the floor prices. He added that these are problems which do not lend itself to a simplistic solution.
The minister further citied an analysis done last year, which showed that only around 1.7 per cent of the tickets sold were in the higher fare bucket. He added that Caps and floors are very interesting, but we should not land up in a situation that pushes up the price of over 90 per cent of passengers to benefit around 1.7 per cent of the passengers'.
Raju had earlier too ruled out the possibility of capping airfares in the backdrop of passenger complaints of arbitrary tariff hikes, saying competition among the airlines will take care of the problem. Recently, government cleared a long awaited new civil aviation policy and proposed a Rs. 2,500 cap for an hour's flight on such routes to ensure affordability and a cap of Rs 1200 airfare for 30 minutes flight, saying that the centre will refund 80 per cent of the losses incurred by airlines due to such caps.