Making it clear that there would not be a “simplistic solution” to deal with exorbitant rise in airfares, he reiterated that capping would not be the answer as that would also push the floor prices.
To stress his stance against capping, the minister cited an analysis done last year which showed that only around 1.7 per cent of the tickets sold were in the higher fare bucket.
“Caps and floors are very interesting… but we should not land up in a situation that pushes up the price of over 90 per cent of passengers to benefit around 1.7 per cent of the passengers,” Mr Raju said in response to a query on whether the government would look at capping airfares.
Stressing that the overall objective is to ensure reasonable pricing of air tickets, the minister said airlines have been responsible in keeping fares reasonable during Chennai and Srinagar floods.
“They (airlines) might not be angels but they definitely are not demons… We need to work with them and find a solution (for higher airfares). These are problems which do not lend itself to a simplistic solution,” Mr Raju said.
Earlier this month, he had ruled out the possibility of capping airfares in the backdrop of passenger complaints of arbitrary tariff hikes, saying competition among the airlines will take care of the problem.