Within a day of Spicejet unveiling its Rs 599 offer fair trade watchdog CCI started probing alleged violation by airlines indulging in fare wars. However, the government took the opposite stance and said today the pricing decision should be best left with the carriers.
Not just Spicejet, from Jet Airways Indigo to Air India, all airlines are indulging in cut-throat rivalry in offering lowest possible airfares. This caused the CCI yet again to probe possible violation of competition laws, although the fair-trade regulator has failed to pin down the carriers on similar charges several times in the past.
Initially, the CCI began its probe some time back following a reference from a Parliamentary panel in this regard, but is did not find anything substantiative against the airlines on cartelisation charges as no one seems to be making profits through ‘the unfair pricing of air tickets’.
During those probes, the watchdog had found that air ticket prices were moving in tandem with the forces of demand and supply and nothing more.
Reacting to a question on the ongoing low-fare war among domestic airlines, Civil Aviation Minister Ashok Gajapathi Raju said that the decision to determine pricing should be left with the carriers.
He further said that air fares are not a regulated market anywhere in the world.
“As of now, airlines choose fares…our regulation is not about putting caps and floors. There are implications of floor and caps.”
The Competition Commission of India (CCI), which has the mandate to keep a tab on unfair trade practices at market place, had looked into the issue of alleged anti-competitive ways in fixing of airfares.
The CCI’s investigation arm — Director General (DG) – is currently probing the matter.
Meanwhile, the ongoing steep discount on airfares has also come under the scanner of the Civil Aviation Ministry.
According to sources, the Ministry is taking a fresh look at the air fare movement and the matter is also being discussed with the aviation regulator Directorate General of Civil Aviation (DGCA).
However, specific details about the nature of the aspects of air fare “movement” that are being looked could not be ascertained.
Last December, the Ministry in an internal note had suggested steps may be taken to fix minimum and maximum air fare”.
“There is a need to fix a cap on the maximum air fare of economy class at a reasonable price of around Rs 20,000,” it had said.
The latest move assumes significance at a time when almost domestic carriers have announced a series of heavy discounts in ticket prices, mainly low-cost airline SpiceJet.
January to March period is considered traditionally as a low travel period. Besides SpiceJet, Jet Airways, Air India, Indigo, GoAir and AirAsia India, have also come out with discount offers.