Crazy cheap domestic Indian airfare could be getting even cheaper

In the burgeoning Indian air-travel market, advance-purchase fares can be as low as two cents (seriously). But not everyone is finding good deals. While foreigners find air travel within India to be one of the most affordable in the world, some local travelers are still have trouble scoring fares in their price range.

In response to what the Indian government is labeling "excessive fares," Junior Aviation Minister Mahesh Sharma told the Times of India that Prime Minister Narendra Modi is concerned about predatory pricing in the market and is calling on airlines to present a plan to lower airfares within the next week.

Steep airfare hikes during festival and holiday periods have drawn particular concern. Sure, we all know that supply and demand can cause fares to spike during the holidays, but it appears that the fare hikes are out-pricing the market. The government has said it would consider imposing price caps on domestic carriers if another solution is not reached, although self-regulation among airlines is the preferred option.

Subhash Goyal, president of the Indian Association of Tour Operators told the Hindustan Times:

"While regulation is not the solution, something certainly needs to be done to keep fares under check. It’s become cheaper to travel to places such as Bangkok and Dubai than tourist destinations within the country."

According to Bloomberg Business, local airlines have lost a combined $10 billion in the past six years, and low airline prices for domestic travel make India among the cheapest in the world despite high government taxes on fuel.

Given the drop in fuel prices worldwide (including in India), the government is hoping some of the savings can be passed on to consumers. Although with an advance purchase price of two cents, the Limbo stick seems to be as low as it can go on some fares.