For the first time since the opening up of the sector, airlines may be asked to apply to the Government for any new capacity induction on various routes. The Civil Aviation Ministry is working on a proposal in this regard.

“With demand growing at lesser pace than the capacity induction, airlines are forced to sell tickets at less than the cost. This is resulting in severe pressure on their finances and consequently on passenger safety. It would be appropriate to bring some restrictions,” a person familiar with the development told Business Line.

The Government may prescribe number of seats to be added for a block period of two or three years. Then airlines will be required to apply for new capacity. The application will be considered and disposed on ‘first come-first serve' basis subject to various conditions. Accordingly, permission for aircraft import or acquisition will be granted as per a report in Business Line by Shishir Sinha & Ashwini Phadnis.

While previous demand and supply on particular route will be kept in mind, the financial health of the airline will be one of the prime considerations. “The whole process has to be impartial and we will see that no airline suffers,” he said.

At present, airlines are free to add capacity on various routes according to their commercial requirements. They just need to apply to the Aircraft Acquisition Committee under the Civil Aviation Ministry for aircraft purchase or import.

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