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Iranian court rejects government intervention in airfares

Iran’s Administrative Court rules against government intervention in airfare pricing.

Iran’s Administrative Court has upheld a ruling that rejected government intervention in airfares after domestic airlines lodged a complaint against the country’s transportation ministry’s decision to impose a cap on ticket price rises.

The semi-official ILNA news agency said in a report on Monday that the Court had notified the Ministry of Road and Urban Development in a letter dated two days ago that Iran’s Market Regulation Headquarters is not authorized to impose prices in the domestic aviation sector in the country.

The Court had issued an initial ruling on the issue in early December after domestic airlines lodged a complaint demanding a cancelation of the government-announced price caps on airfares.

The ruling was suspended after the government appealed the verdict.

However, in its letter on June 15, the Court upheld the verdict which stipulates that airfare pricing system in Iran is determined by supply and demand in the market.

The ruling came days after Iranian airlines announced new ticket price rises for domestic routes.

Iran’s official IRNA news agency said the transportation ministry may lodge a fresh appeal against the decision and bring the case to a meeting of heads of three branches of the Iranian government.

Iran’s civil aviation sector has been struggling in recent years both because of the impacts of the coronavirus pandemic and an aircraft shortage caused by the US sanctions on the country.

However, airlines have been offering regular flights to various domestic destinations by relying on increasing government support and by using the services of a home-grown aircraft maintenance sector.

That comes as Iranian government officials say they cannot just accept exorbitant prices charged by the airlines while insisting that low fares cam trigger more demand and lead to growth in the aviation sector.

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