The central government is working out on a proposal to regulate domestic fares so airlines cannot charge passengers more than a fixed upper limit. Rs. 20,000 is being proposed as the upper limit for a one-way economy class ticket within the country.
The government may also fix a lower limit below which carriers will not be allowed to offer tickets to prevent airlines from under-cutting each other through “special fares”.
The move is seen as a direct fallout of the spate of cancellations following the crisis in budget carrier SpiceJet that has led to skyrocketing domestic air fares in the peak holiday season.
Experts, however, cautioned that capping prices could hurt passengers by pulling up the average fares as airlines could be tempted to offer tickets at prices around the maximum cap.