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Iran cancels fare hikes amid low demand for air travel

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
File photo shows passengers leaving an airport terminal in Iran.

Iranian airlines would not be allowed to increase fare prices despite lower demand for air travel and restrictions imposed on the number of passengers booked for flights to curb the spread of the coronavirus pandemic, says the country’s chief aviation authority.

Iran’s civil aviation authority said in a Monday statement that ticket price hikes announced last week by the Association of Iranian Airlines (AIA) would be halted until at least early December.

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

IAI increased ticket prices by nearly two-fold in a bid to help airlines cope with lower demand amid the spread of the coronavirus 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 season which begins in late March and continues into early April.

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