Domestic airfare caps hiked by 10-30% till March-end; Indigo, SpiceJet stock gains

Currently, the domestic airlines capacity is allowed at 80% of a pre-Covid level, which is also extended till March 31.

Feb 12, 2021 02:02 IST India Infoline News Service

The Civil Aviation Ministry has raised the lower and upper limits on domestic airfares by 10% to 30%. This new hike will continue to be in effect till March 31, 2021, until further notice from the ministry.

For flight duration less than 40 minutes, the airfares are hiked to Rs2,200-Rs7,800 from earlier Rs2,000-Rs6,000. Meanwhile, for travel duration which is 180-210 minutes in India, the airfare has been raised to Rs7,200-Rs24,200 from the previous Rs6,500-Rs18,600, as per the ministry.

Currently, the domestic airlines capacity is allowed at 80% of a pre-Covid level, which is also extended till March 31. Notably, only Indigo which is the largest airline in terms of market share, has managed to deploy even 70% capacity of pre-Covid level compared to other airlines.

At around 2.36 pm, Interglobe Aviation (Indigo) was trading at Rs1634 per piece up Rs6.90 or 0.42%. The airline has touched an intraday high of Rs1704 per piece. Meanwhile, SpiceJet was trading at Rs90.60 per piece up 3.31% on Sensex.

Recently, Union civil aviation minister Hardeep Singh Puri has stated that domestic flights airfare caps may go when the summer schedule kicks in from April, in a reply to a question asked in Rajya Sabha. Puri states that capping airfares on domestic flights was an “extraordinary measure”, however, can be done away when airlines reach pre-Covid levels.

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