Oil prices, muted traffic: Why airlines may not benefit from airfare hike

On Thursday, the Ministry of Civil Aviation hiked the airfare price band on flights with 90 to 120 minutes of duration to Rs 3,900, up from Rs 3,500 earlier

The revision in air fare price band by up to 30 per cent is a move optically in the right direction, analysts said, but will not benefit airlines much amid steadily rising oil prices. The proposal, they believe, will make a meaningful impact only if the capacity remains capped amid plateaued passenger growth.

On Thursday, the Ministry of Civil Aviation revised the fare price band on flights with 90 to 120 minutes of duration to Rs 3,900, up from Rs 3,500 earlier. The cap on maximum chargeable fare has been raised to Rs 13,000 from Rs 10,000.  

However, the cap