Oil prices on the international market have been declining. This is caused by the fact that more players are bringing onboard more oil while the demand is low. Simple economics state that if the supply is high, and the demand is low, prices of goods decline. That is what is currently happening to oil prices. Major oil producers like UAE continue producing huge amounts of oil while the demand from countries with a struggling economy continues to decline. This is a trend that is not expected to change soon because the key players are not willing to discuss on how to solve it.
This incident, however, should be beneficial to the consumers. The transport sector, and to be more specific in this case, the airlines are reaping enormous benefits. It is with this knowledge that the government stated that it will request the airlines to pass the benefit to the passengers. According to the Minister of Civil Aviation, Ashok Gajapati Raju, they will submit the suggestion but not dictate the rates for the air tickets.
With the fluctuating fuel prices, the airlines underwent a mixture of events; both lose and gains. At the time of high oil prices, the guys experienced a rough time. That is what happens whenever the prices are high. Now that they are getting profits, they will be requested to pass as much benefit as they can to the travelling public. This was the response that Raju provided when he was asked whether there would be a directive from the government to the airlines to cut down ticket rates.
It is important that the government does not dictate the rates. Doing so would result to a whole new set of logistic problems. The airlines have to be given the liberty of operating independently. However, regulating them and providing advice is a good thing.
Raju provided this information when he had visited Cochin International Airport Limited. The minister wanted to learn more about the system for generating electricity be solar. He stated that the Aviation Ministry’s analysis of the air tickets drove them to conclude that only 1.7% of the country’s air tickets were higher priced.
The minister equally commented on the 5/20 rule. In this rule it is a requirement that domestic carriers to first complete domestic operations of five years and have twenty aircraft fleet so as to begin flying abroad. He insinuated that he may be planning to have it done away with when he said he has no intention of supporting something that pulls that Indians down. There will soon be a new policy for civil aviation.
Raju said that the plan is now in an advanced stage. Only a few issues are remaining that need to be ironed out. Immediately that has happened; the Indian government will involve its inter-ministerial consultancy. It is important for such matters to be taken back to the cabinet. Once the process gets to completion successfully, the policy will be released.