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Private aviation firm Vistara's CEO Vinod Kannan on 19 June said that he would be happy if the lower and upper limits on airfares are increased but the best solution would be for the airlines to have absolute freedom to price.
Earlier on 16 June, Aviation Turbine Fuel (ATF) prices in India were hiked by the steepest-ever 16 per cent to catapult rates to an all-time high in step with hardening international oil rates.
On June 1, IndiGo CEO Ronojoy Dutta said the civil aviation ministry should consider increasing the upper limits on domestic airfares as the rising ATF prices have become a “real problem".
While, SpiceJet CMD Ajay Singh on June 16 said the sharp increase in ATF prices and the depreciation of the rupee have left the domestic airlines with no choice but to immediately raise airfares.
When the aviation services were resumed on 25 May, 2020-- post COVID-19 lockdown, the civil aviation ministry had imposed lower and upper limits on domestic airfares based on flight duration.
According to a price notification of state-owned fuel retailers, the price of ATF was on 16 June increased by ₹19,757.13 per kilolitre, or 16.26 per cent, to ₹1,41,232.87 per kl ( ₹141.2 per litre) in Delhi.
Reacting to a question asked if upper caps on airfares should be increased amid rising ATF prices and weakening rupee Vistara's CEO Vinod Kannan on 19 June said, ""Our position, as well as Vistara is concerned, we have always said the best solution or the best open market is where there is absolute freedom to price. That is the ideal situation."
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"They (fare caps) are there for certain reasons. I believe that they are needed to protect the airlines but also the customers (passengers)," he added while speaking to reporters on the sidelines of the 78th annual general meeting of International Air Transport Association (IATA) in Doha.
"We are nowhere (in a situation) where we are hitting the (upper) cap 80-90 per cent of the time because as you know demand is also the function of the day of the operation. It is also fiction of other factors as well," he added.
He said, "Yes, I will be happy if the fare cap is increased right through, not just the ceiling but also the floor. At the end of the day, our position remains that market pricing is the most optimal."
With inputs from PTI.