Can cap fares in emergencies, but won't help, says Naidu in Parliament

Civil Aviation Minister K Rammohan Naidu on Friday defended the government’s decision to keep India’s aviation market largely deregulated, even as he acknowledged the Centre’s extraordinary powers to step in and cap fares when prices “move from normal to abnormal”.Replying to a private member’s resolution in the Lok Sabha, seeking stronger regulation of airfares, Naidu said fare control could not be treated as a cure-all. “Capping fares is never a single-route fix,” he said, adding that aviation pricing was shaped by several layers -- airline viability, fleet availability, seasonal demand and global supply chain disruptions.

The resolution, moved by Congress MP Shafi Parambil, was later withdrawn.

Naidu pointed to the recent distance-based fare ceiling imposed after IndiGo’s operational breakdown earlier this month, but stressed that such interventions must remain exceptional. Domestic fares, he argued, were “broadly aligned with global pricing” and a blanket cap would not be “practical or healthy” for the sector.

He maintained that a deregulated market “ultimately benefits passengers”, noting that ticket prices spike during festive peaks across the world. “If we want civil aviation to grow, the foremost requirement is that it stays deregulated so that more players can enter,” he said.

At the same time, he underlined that deregulation did not equate to airlines getting a “free pass”, and that the government retained the authority to act when fares become unreasonable.

The minister cited data showing a “43 per cent reduction in airfares” in real terms when adjusted against the Consumer Price Index, though he did not specify the reference period for this comparison.

Naidu flagged the shortage of aircraft as the most pressing structural constraint. Indian airlines have ordered more than 1,700 planes, but delivery schedules are slipping due to persistent global supply chain issues. To reduce this dependence, the minister said the government had taken a strategic call.

“We are not going to wait endlessly for aircraft to arrive. We are preparing a programme to build aircraft in India. We should have a Made-in-India plane,” he said.

He said HAL was in talks with Russia for technology transfer related to the regional Sukhoi SJ-100, with an MoU already in place Discussions were simultaneously underway with Brazilian manufacturer Embraer to manufacture in India, he added.

To test whether controlled pricing could work without distorting the market, Naidu said state-run Alliance Air had launched a three-month pilot of fixed fares. Based on passenger response, the ministry may consider a similar framework for private carriers as well.

The debate saw sharp criticism from the Opposition. Congress member Varsha Gaikwad alleged that air travel had turned into an “exercise in harassment and exploitation” for ordinary citizens.

She said fares that once ranged between Rs 5,000 and Rs 6,000 were now touching Rs 25,000 to Rs 30,000, with “layers of hidden charges” burdening passengers. The collapse or consolidation of multiple airlines, she argued, had left the market vulnerable to monopolistic pricing. “We all saw the consequences of this phenomenon last week,” she said.