Civil aviation is among industries that bore the brunt of Covid-induced economic disruption. A fallout of the public health emergency is that domestic airlines were not allowed to fly at full capacity for over 18 months. Therefore, GoI’s decision this week to remove capacity restrictions on airlines is a positive development. It helps both aviation companies and the cause of business normalisation.

During the worst phase for the aviation industry, both GoI and states pitched in to provide support. The primary aid came in the form of a price band for air tickets. It helped put a floor under ticket prices when capacity restrictions were in place, and a price ceiling that was aimed at helping flyers. Separately, the aviation industry was helped through GoI facilitating coordination with IAF to rationalise routes and, thereby, cut fuel costs. Aviation companies were brought under the emergency credit guarantee scheme and the GST rate on domestic maintenance and repair was cut from 18% to 5%. Airlines are now receiving a boost from the rapid increase in passenger traffic.

GoI data shows that passengers handled by Indian airports more than doubled between 5.99 million in June to 12.97 million in August. August’s numbers, the latest available, are more than double on a year-to-year basis. September should be even better. Around a month back, GoI made the price band applicable only for tickets bought for flying within 15 days. Market prices apply for flights scheduled beyond that. It’s time the 15-day price band goes as well. When business is normal, market forces should get full play. Aviation companies should not get emergency help anymore. And consumers needn’t worry. Competition will keep prices down, especially with a privatised Air India also set to join the battle.

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This piece appeared as an editorial opinion in the print edition of The Times of India.

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