Iran would not allow its airlines to hike fares to offset COVID-19 losses

Iran would not allow its airlines to hike fares to offset COVID-19 losses

The Civil Aviation Organization of Islamic Republic of Iran announced today in a statement that airline ticket price hikes announced last week by the Association of Iranian Airlines (AIA) would be halted until at least early December.

Iran’s chief civil aviation regulator said that the country’s air carriers would not be allowed to raise airfare prices, despite decreased demand for air travel and restrictions imposed on the number of passengers booked for flights to curb the spread of the COVID-19 virus.

The statement said more discussions will be needed between representatives of the airlines and the government to sort out fare price issues.

AIA increased ticket prices by nearly two-fold in a bid to help airlines cope with lower demand amid the spread of the COVID-19 in Iran, one of the worst hit countries by the disease in the Middle East region.

That comes as Iran’s transportation ministry has imposed a cap of 60 passengers per flight to observe social distancing rules needed to curb the spread of the virus.

Airlines have also been insisting on fare hikes as they grapple with rising costs related to devaluation of the local currency.

However, the price hikes sparked widespread concerns that the commercial aviation in Iran would become a luxury only available to the rich in the country. 

Iran has liberalized airfare prices for nearly a decade, allowing airlines to offer various fee models and to create more competition in the market.

The pandemic inflicted a heavy loss on the industry in the very early days of its outbreak in Iran which coincided with the busy travel season of the Persian New Year.

Reports at the time suggested that flight cancellations had caused nearly $300 million in losses for the Iranian airlines during the peak season which begun in late March and continued into early April.

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