Domestic Economy

Command Pricing of Airfare Undermining Aviation Safety

The outbreak of Covid-19 and the imposition of new ceilings on airfares have inflicted huge losses on airlines. As their income solely came from domestic flights over the past three years, their planes have been grounded gradually
Command Pricing of Airfare Undermining Aviation Safety
Command Pricing of Airfare Undermining Aviation Safety

Command pricing of air transportation services has led to the gradual grounding of Iranian air fleet. The continuation of this policy does not allow the existing planes to be replaced and denies us the supply of parts and new investments, Mohammad-Sadeq Rasoulpour, a member of the Board of Directors of the Association of Iranian Airlines, said.
“According to Article 161 of the Fifth Five-Year Development Plan [March 2011-16), the government was obliged to diversify the rates of cargo and passenger air transportation services by the end of the first year of the plan [March 2012] and fully liberalize airfares as of the beginning of the third year of the plan [March 2013]. Notably, the government was also tasked with making rates real as per Article 53 of the Sixth Five-Year Development Plan [March 2017-22],” he was quoted as saying by the news portal of Tehran Chamber of Commerce.
The official added that air transportation at best accounts for 1% of all modes of transportation in Iran, noting that with the enforcement of the rate liberalization law from the fiscal 2015-16 to 2019-20, flight rates on domestic routes were determined based on market conditions and exchange rates, and passenger transportation increased by more than 20% annually.


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