Airlines need price flexibility on regional routes: Study

Airlines should be flexible in ticket pricing rather than capping air fares at Rs 2,500 for one-hour flights, a study says.

"The proposed all-inclusive cap of Rs 2,500 on air fare is even lower than the first AC train fare for longer routes covered by one-hour flights (600-800 kilometres). The cap on air ticket should be linked to distance travelled," the study said.

The suggestion is part of a study on 'Regional and Remote Connectivity in India' released by Civil Aviation Minister Ashok Gajapathi Raju at an event today.

According to the report, since there is a high risk of a lower load factor on regional routes, more flexibility should be given to airlines for pricing these tickets. The cap should be applicable to a fixed proportion of seats, and carriers should be given flexibility of pricing rest of the seats, it noted.

This draft policy has suggested measures to tap the growing potential of the domestic aviation sector, including 2 per cent levy on all air tickets to fund regional connectivity.

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