1. Market forces should decide airlines’ pricing norms: Experts

Market forces should decide airlines’ pricing norms: Experts

Even as passengers looked forward to the government implementing its new proposals to regulate cancellation, refund and baggage norms of domestic airlines, aviation industry experts warned that potentially this can even push up fares and that pricing policies must not be micro-managed.

By: | New Delhi | Updated: June 12, 2016 2:33 PM
5/20 rule On ticket cancellation fee, for which the new proposal is that airlines would return all taxes and not charge a rupee more than the basic fare. (Photo: AP)

Even as passengers looked forward to the government implementing its new proposals to regulate cancellation, refund and baggage norms of domestic airlines, aviation industry experts warned that potentially this can even push up fares and that pricing policies must not be micro-managed.

Industry observers whom IANS spoke to said the new proposals tend to tweak the free-market pricing mechanism which could lead to negative consequences for the sector — as will be the case once Saturday’s proposals unveiled by the government come into force to rein in indiscriminate practices of some domestic passenger carriers.

Also read | GoAir shows intent to fly to Europe

“The government should refrain from getting into micro-management issues like free baggage allowance, baggage-fee per kilo. It is best left to market forces,” said Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG.

“Airlines that over-charge or inconvenience passengers will anyway get punished through word of mouth and social media. The government should consider stepping in only in extreme cases — but this definitely appears to be an overkill,” Dubey told IANS.

On ticket cancellation fee, for which the new proposal is that airlines would return all taxes and not charge a rupee more than the basic fare, Dubey said: “A fee of Rs 1,000 or the base fare, whichever is lower, appears reasonable and can be revised from time to time.”

Passengers had some reasons to cheer as they were piqued by the policies followed by some airlines.

“To pay a re-scheduling charge of Rs 2,000 on a Rs 4,500 ticket is ridiculous. I hope the new measures take note of this aspect as well. Plus, Rs 300 or more for a kilo of excess baggage is also very high. A cap of Rs 100 sounds reasonable,” said G. Natarajan, a resident of Madurai.

  1. No Comments.

Go to Top