New Delhi, June 23 (IANS) Civil Aviation Minister Pusapati Ashok Gajapathi Raju on Thursday said a cap on airfares will not help reduce the steep rise in ticket prices.
"We did an analysis which showed that 1.7 per cent of the tickets sold were of high cost. So, the last minute high price of ticket is a matter of concern," Raju said at an industry event here.
According to Raju, a cap on airfares will push up floor prices as well and make the overall ticket costs more expensive.
"But we should not land up in a situation that pushes price of over 90 per cent of passengers for the benefit of 1.7 per cent," Raju said.
The minister was speaking at the '9th International Conference on Indian Civil Aviation and Tourism', organised by the Associated Chambers of Commerce and Industry of India (Assocham).
Raju observed that airlines have kept airfares at reasonable levels even during emergency situations like the Chennai floods.
"They might not be angels but they definitely are not demons. We need to work with them to find a solution," Raju said.
In April, the minister had informed the Lok Sabha in a written reply to a question that, as per an analysis done by his ministry, ticketing -- or charges imposed by the airlines -- were contributing just two per cent to higher fares.
"So, we realise the prices of tickets have come down in most routes, particularly where the competition is more, it has come down," he had said at that time.
"What is bothering us is where the competition is less, air fares are a bit high. We need strategies to increase capacity there. Capacities and growth in the country have been going up. So, if we stifle the growth, we will not be able to even attend to this problem," he said.
The minister also said that it was not that airlines were not responsive to government's calls. During the Chennai and Srinagar floods, as also during the Jat agitation, his ministry had issued advisories to airlines and some of them did respond.
"Capacity does get increased and things do come under control. We want to keep the baby and throw only the bathwater out. We do not want to throw the baby along with the bathwater."
