Nov. 25: Vowing to “bring discipline” to the aviation sector, the civil aviation minister, Mr Praful Patel on Thursday warned airlines that the government would take strict action against them if they continued charging unduly high fares and suggested that airlines formulate a price band within which fares should be charged.
Pointing out that “predatory pricing” cannot be justified, the minister said airlines cannot go for a “free run” on fares. Stating that the Director General of Civil Aviation (DGCA) DGCA had sent a notice to some airlines, Mr Patel said the government would “discuss ways to regulate fares on low and high (price) bands”.
“Several airlines have increased fares by a big margin. The DGCA used its powers, asked for information and has given orders that in case of arbitrary increase of fares, action will be taken against the airlines,” he said. Asserting that the government was “not against flexible pricing”, Mr Patel, however, said passengers should enjoy low fares. Referring to the rapid growth of air traffic, he cautioned airlines not to exploit passengers.
With the peak tourist season underway, air fares usually rise every year during winter since flights are full. But the increase this year seems to have surpassed those of previous years, prompting the government to take notice.
The civil aviation ministry had recently stated that the DGCA has directed all domestic airlines to “furnish a copy of the route-wise tariff across its network in various fare categories to the DGCA on the first day of every month”, and that “any significant and noticeable change in the established tariff so filed with DGCA shall be reported to the DGCA within 24 hours of effecting such changes”
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QWhat is the issue with airfares?
In days following Diwali, airfares on some routes went up 3-4 times their regular levels. Flying from Mumbai to Delhi was costlier than flying to Europe or North America.
Q Why did ticket price increase?
Airline tickets around the world are priced by computer programs, which adjust fares according to demand and supply. Fares tend to be higher over weekends compared to weekdays, when more people are travelling. Similarly, fares also increase during holidays. This time however, two other factors came into play. Because of lower traffic during the recession during 2008-09, domestic airlines were going slow on adding new aircraft. Meanwhile, the last one year has seen a sharp increase in number of people travelling.
Q How will the situation work out?
If the growth in air travel sustains, airlines will start adding aircraft again. This could rationalise the charges. A price control on airfares without increasing the number of seats may not help much.