One Route, One Fare: India's Experiment in Aviation Accessibility

Abstract

One Route One Fare of India is an ambitious project of democratizing the aviation industry. It keeps prices of airfares constant, whether you book early or late as well as the demand fluctuations. Introduced as part of the UDAN regional connectivity program and operated primarily by Alliance Air, which is majority-owned by the government, the program aims to attract first-time passengers and formerly under-serviced areas by eliminating the price fluctuation associated with dynamic pricing models. Passengers travelling on the routes connecting smaller cities to major hubs are charged the same faretraditionally ₹2,500- regardless of whether they make their reservations many months before boarding a flight or just hours before the flight. This is a non-traditional model of the industry, yet it addresses actual barriers to accessibility. Initial statistics indicate that 30-40 percent of the voyagers are new fliers and this is an indication of market growth over and above the current customers. However, the project requires the government subsidies in order to sustain it. The per-passenger support varies between ₹500 to ₹3,000 remunerations depending on the route performance. The critical inquiries are on the way to select the most optimal routes, the distribution of benefits throughout the income groups, and whether the program is financially sustainable in the long-term perspective. This discussion examines the economic reasoning, operation issues, and policy impacts of the initiative. It provides evidence-based suggestions to policymakers interested in expanding the program, airline managers who face fixed-price considerations, and international observers who may want to imitate the program. Even though the ultimate success is unpredictable, the experiment in India offers a number of insights on the aviation accessibility policy. It demonstrates that other ways of pricing that are more dynamic should also be taken seriously, although this might entail subsidies and further complications in the operations.