Iran may liberalize air ticket prices

Business Materials 9 May 2014 11:50 (UTC +04:00)

Baku, Azerbaijan, May 9

By Fatih Karimov - Trend:

Iran may liberalize air ticket prices as of May 18, a high-ranking Iranian official said.

Ali Mohammad Nourian, Iranian deputy transport minister, said that based on the approval of the national higher council of aviation, the air ticket prices will be liberalized as of May 18, if the approval is ratified by the country's president, Iran's ISNA news agency reported on May 9.

The Civil Aviation Organization of Iran has announced earlier that it will liberalize ticket prices in order to encourage domestic airlines to improve services.

On April 20, the Fars news agency quoted a senior Iranian aviation official as saying on the condition of anonymity that Iran is planning to liberalize air ticket prices in five months within the framework of the second phase of the subsidy reform plan.

The first phase of the subsidy reform plan kicked off in December 2010, when prices of staple foods and utility bills, as well as gasoline, soared overnight.

In the second phase of the plan, subsidized gasoline, available to each motorist in limited amounts, rose from 4,000 rials ($0.16, using the central bank's official exchange rate) per liter to 7,000 rials ($0.28).

It is estimated that the government will acquire 480 trillion rials (about $19.3 billion) in the current Iranian calendar year (March 2014-March 2015) in revenues through the implementation of the second phase of the economic reform plan.

The administration of President Mahmoud Ahmadinejad implemented the first stage of the subsidy reform plan toward the end of 2010 in an attempt to wean the country off food and fuel subsidies.